Mauree Gingrich : Harper Renews Call for Shale Tax to Meet Pension Obligations, Support Public Safety

Harper Renews Call for Shale Tax to Meet Pension Obligations, Support Public Safety

HARRISBURG - With the Commonwealth facing serious financial challenges heading into the next fiscal year, Rep. Kate Harper (R-Montgomery) has re-introduced legislation to enact a severance tax on natural gas drilling.

'Current revenues simply aren't keeping pace with the demand for education and health and human services funding,' Harper said. 'These two areas alone make up 80 percent of the state budget, and they increase every year.

'Before we even think of raising sales or income taxes on our hard-working families, we should look to the severance tax to help alleviate some of our most pressing budget challenges,' she added.

House Bill 113 proposes a competitive tax rate of 3.5 percent of the gross value of units severed at the wellhead. Half of the revenue generated by the tax would be used toward the unfunded liability in the state's school employee pension system, helping to protect against higher school property tax rates.

The other half would be used to support public safety by providing additional funding to the Pennsylvania State Police.

'Our state police have many statewide responsibilities, but they also serve as the one and only law enforcement agency in more than 60 percent of our state's municipalities - most of them rural - and that stretches the agency's resources,' Harper said. 'Using severance tax revenue to support public safety in rural areas ensures these regions contribute to their police services, just as communities like mine pay local taxes to support their law enforcement agencies. It also essentially keeps much of the severance tax money local to the areas where it is generated.'

A growing portion of funding for the Pennsylvania State Police comes from the state's Motor License Fund, which was designed to be used toward highway and bridge construction and maintenance. An alternative source of funding for the state police would free up more dollars for infrastructure improvements across the state, Harper added.

'No one likes higher taxes, including me,' Harper said. 'But the fact is, the Commonwealth is struggling financially, and we need to find a way to support our core responsibilities without overburdening our residents and families or our employers. I believe my proposal is a fair way to achieve this goal.'

Harper's legislation would leave in place the current impact fee assessed on natural gas wells under Act 13 of 2012. The fee has generated more than $1 billion for the Commonwealth, which has been used to address impacts in communities where drilling takes place and to invest in statewide environmental programs.

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
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