Impact fees garner support from state community leaders
Community leaders who fear the potential impacts of Gov. Tom Wolf's severance tax proposal on natural gas asked lawmakers Tuesday to maintain per-well fees that have allowed for hundreds of millions of dollars' worth of municipal improvements.
Wolf vowed to maintain levels of funding flowing to counties and towns through the impact fee enacted by Act 13 of 2012. But elected officials and advocates told a joint state Senate committee meeting in Harrisburg they see added taxes chasing drillers away, making companies unwilling to spend extra money on roads and freezing a funding source that would otherwise grow with more wells.
“Act 13 is a well-crafted piece of legislation. It is working, and it needs to stay,” said Tioga County Commissioner Erick Coolidge, a Republican. He was one of 12 people to testify before the joint meeting of the Local Government Committee and the Environmental Resources and Energy Committee.
The county commissioners and leaders of township groups, economic development groups and conservation districts listed examples of what they've spent with their part of the combined $620 million the fees raised over three years. Many mentioned new fire equipment, bridge repairs, courthouse improvements, 911 enhancements and programs that help farmers.
“I think we understand. We've gotten a consistent message here today,” said Sen. Gene Yaw, R-Williamsport, who chaired the hearing.
Wolf, a Democrat from York who won election last year on a promise to increase taxes on growing natural gas development, last month outlined his 5-percent tax and an additional levy. Hours after the Senate hearing, Wolf included the proposal to fund public education in his first budget address.
Wolf has denied industry claims that the taxes would hurt business, even while gas companies are dialing back drilling plans and cutting budgets because of low oil and gas prices.
“If Act 13 dollars are held harmless … and there is an additional severance tax imposed on the natural gas industry that would fund property tax relief and more money for schools, why would you be opposed to implementing that proposal?” Sen. John Yudichak, D-Luzerne, asked during the hearing.
“If the industry leaves … the billions of dollars you lose will cripple the state,” responded Alan Hall, a Republican commissioner in Susquehanna County, the top gas-producing county in the state.
Impact fee money would increase if more wells are drilled, so simply maintaining the revenue would harm communities that host drilling, said Elam Herr, assistant director of the Pennsylvania State Association of Township Supervisors.
Some officials said they expect companies squeezed by more taxes and low prices to stop spending extra money on roads, limiting it to only what they're required to fix.
“That will all stop when we increase taxes,” said Sen. Kim Ward, R-Hempfield.
Township and local groups can use impact fee money as matching funds for certain grants. Leader said they feared that would not happen under Wolf's plan.
Wolf has not detailed his mechanism for getting gas tax money to communities. Act 13 states that the impact fee goes away if a severance tax is enacted.
Yudichak said he supports the funding and the projects detailed during the hearing. But he would like to see a comprehensive state plan for spending the money.
“That can't be funded under a fragmented tax policy among 67 counties under Act 13,” he said.
David Conti is a staff writer for Trib Total Media. He can be reached at 412-388-5802 or email@example.com.