Feb. 08, 2016
HARRISBURG – With the cost of key state budget areas – education and human services – continuing to rise, Rep. Kate Harper (R-Montgomery) today appeared before the House Environmental Resources and Energy Committee to make the case for a severance tax on natural gas drilling in the Commonwealth.
Harper’s
House Bill 82 would leave the state’s current impact fee and distribution formula in place and add a 3.5 percent severance tax. The new revenue would be directed toward the Public School Employees Retirement System to help reduce the unfunded liability that is driving up costs at both the state and school board levels.
“When in the course of human events, it becomes necessary to consider new or increased sources of revenue to balance the Commonwealth’s budget – and I believe we are in one of those budget times – we want to make sure that we do it correctly,” Harper said. “The need for new revenues is not something I take lightly, but it can be understood as the logical effect of costs rising in our biggest budget items while the sluggish economy – the worst recession since the Great Depression – means sales and income tax revenues simply cannot keep up.”
Harper noted nearly 40 percent of the budget goes to education, where salaries and pension and benefit costs tend to rise over time. Another 40 percent goes toward human services, which among other things provides costly medical and nursing care for seniors on fixed incomes.
In her remarks to the committee, Harper stressed two key principles she believes should guide any debate on severance taxes:
- It must be a rate that is reasonably competitive with neighboring states.
- It must maintain the current impact fee and its distribution of revenues to the local communities impacted by drilling and to the statewide environmental programs that exist to mitigate the harmful effects of a heavy industrial land use on our environment.
But no matter what a severance tax may ultimately look like, Harper warned it is not a panacea for the Commonwealth’s budget woes, noting the dramatic drop in price of both petroleum and natural gas, which has reduced impact fee revenues and drilling in the state.
“There is an opportunity here to generate some much-needed revenue to address a major cost-driver – pensions – of both our state budget and school district budgets,” Harper said. “But 3.5 percent of nothing is nothing, so we need to make sure we do it right. This is an industry that is really helping the economy in rural Pennsylvania and the Commonwealth as a whole, so we do not want to chase it away, and a fair severance tax will not do that.”
The committee also took comment a second severance tax proposal, House Bill 1536. Harper said she was encouraged by the discussion in committee and hopes for legislative action on the severance tax issue as lawmakers work toward a 2016-17 state budget.
To watch video of the full committee meeting, click here.
To read Harper’s statement to the committee, click here.
Representative Kate Harper
61st District
Pennsylvania House of Representatives
Media Contact: Rep. Harper’s Blue Bell Office
610.277.3230
KateHarper.net /
Facebook.com/RepKateHarper
kharper@pahousegop.com