New Castle News

Editorials

May 16, 2014

Our Opinion: Will governor sign on to gas extraction tax?

NEW CASTLE — The need for money can make people do some unexpected things.

Consider the case of Pennsylvania Gov. Tom Corbett, who took office pledging not to raise taxes and continues to claim he has not — even though there is substantial evidence to the contrary.

Pennsylvanians are paying more at the pumps for gasoline these days, thanks to a state transportation funding bill that raised fees on gas suppliers. Corbett supported the move and denied it is a tax.

Then there was the impact fee imposed on the shale gas industry. The fee is primarily designed to cover the costs of damage to roads and deal with the inconvenience and related problems from drilling and production. Again, Corbett denied this is a tax.

Well, it will be interesting to see how things evolve now, in an election year, with Pennsylvania facing about a $1 billion budget deficit.

In his budget plan for this year, the governor wants to boost spending, particularly in the form of new education grants. The proposal includes optimistic revenue projections that aren’t panning out.

Now it turns out the governor and legislative leaders may be talking in private about an extraction tax on shale gas. It’s something Corbett has aggressively opposed in the past, claiming it would deter the development of the industry in the commonwealth.

But in the current budget situation, something’s got to give. And with politicians typically reluctant to cut spending and programs while they seek to solicit votes, a tax on shale gas suddenly has considerable appeal.

And while that assessment might be dismissed as pure speculation, officials in Corbett’s administration could be paving the way for a key shift in the governor’s position. They have acknowledged the governor is discussing the budget with lawmakers without dismissing the notion of an extraction tax.

If this plan proceeds, it could have an interesting look to it. An extraction tax almost certainly would require Democratic votes in the Legislature. Many Republican lawmakers have signed on to restrictive anti-tax-hike pledges they are unlikely to break.

That means any extraction tax and resultant spending package will have a bipartisan look to it. We presume one outcome will be more money for public education, but the way the funds will be disbursed could be a bone of contention.

And we can’t lose sight of the fact the gubernatorial election will be part of this. If Corbett agrees to an extraction tax, there will still be battles over the amount. Jousting along these lines will be influenced by the upcoming November clash between Corbett and his Democratic opponent, to be selected next week.

Considering the significance of the shale industry in Lawrence County and the rest of the state, this will be a debate worth watching very closely.

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