Agency wants cut of severance tax

Harrisburg – If state lawmakers this fall are going to put a
severance tax on gas withdrawn through Marcellus shale wells as
promised, the Pennsylvania Fish & Boat Commission wants to
share in the proceeds.

The commission’s executive director, John Arway, made that clear
for commissioners and the public at the agency’s most recent
meeting in Harrisburg.

It is almost certain that lawmakers will institute a tax this
fall on gas withdrawn from the Marcellus shale formation, he said.
In adopting a state budget for 2010-11, they also adopted a formal
declaration declaring their intent to have such a tax in place by
Oct. 1.

They used similar language previously to force agreement on how
to spend the state’s share of revenues generated by casino
gaming.

Several severance tax proposals have been moving through the
Legislature in recent months. The one with the most traction right
now, said Tim Schaeffer, director of the commission’s bureau of
policy, planning and communications, is House Bill 1489, introduced
by Rep. Camille Bud George, a Clearfield County Democrat.

It calls for the first $75 million in taxes collected to be
deposited into the state’s general fund. After that, 50 percent of
the remaining funds would go to the general fund, 20 percent to
local governments, 15 percent to the environmental stewardship
fund, 3 percent each to the Conservation District Fund and the Fish
& Boat Commission, 2 percent each to the Pennsylvania Game
Commission, Hazardous Sites Cleanup Fund, Department of Public
Welfare and Oil and Gas Environmental Disaster Recovery Account and
1 percent to Department of Environmental Protection for dam repairs
and removal.

That bill is before the House Appropriations Committee awaiting
action.

The 3 percent it promises the commission would mean millions and
allow it to hire the people necessary to get involved in permitting
Marcellus shale wells, monitor their impact on water and the
environment as a whole and pursue remediation when problems arise,
said Arway.

That’s why it’s critical the commission be a beneficiary of any
tax, he said.

“Our stance is that there’s a need for a severance tax and part
of that need is that some of the money must go to conservation. And
we’re part of conservation,” Arway said.

To make that clear to lawmakers, the commission is embarking on
a “10-by-10” strategy. Staff in the commission’s policy, planning
and communications bureau is developing “talking points” on the
need for the tax and the need for the Fish & Boat Commission to
share in those revenues, Schaeffer said.

Each of the agency’s 10 commissioners – it has nine now, with
one seat vacant – is being asked to identify 10 people who would be
willing to reach out to lawmakers “to talk about the need for
conservation funding,” Schaeffer said.

Each of those people will in turn be asked to contact lawmakers
twice, once before Labor Day and once after. The hope is that can,
among other things, carry the word about the commission to the
Capital.

“A lot of people in the Legislature are not aware of that the
Pennsylvania Fish & Boat Commission does, or about its role,”
Schaeffer said.

Commissioner Richard Czop, of Philadelphia agreed, noting that
he’s been introduced by lawmakers as being a representative of the
Pennsylvania “Fish and Game Commission,” when Fish and Game are two
separate entities.

He also pointed out that getting a share of any Marcellus gas
tax would have benefits for anglers.

“It’s more likely we’ll need a fishing license increase if we
don’t get this tax. You can say that,” he said.

The commission is already counting on the tax money in one way.
Commissioners adopted a new strategic plan at their July meeting
that’s meant to guide priorities over the next five years. In it
are references to Marcellus shale taxes, the commission’s support
for them and ideas on how that money would be spent.

That was too much for commissioner Tom Shetterly, of Charleroi
in Washington County. He said that while he agrees the commission
needs funding, and has no problem with commissioners lobbying
individually for the agency to get a share of the tax, he doesn’t
believe the commission should be planning for it on paper.

“To put that in a document, we’re sticking our necks out. We
shouldn’t be lobbying about legislation that doesn’t impact this
agency,” Shetterly said.

At least a few of his fellow commissioners disagreed.

“If we think that a severance tax will benefit us, then we need
to lobby to be a part of that,” said Commissioner Ed Mascharka, of
Erie.

“I think we need to put the pedal to the metal and we have,”
agreed Commissioner Len Lichvar, of Somerset County.

Arway said the mention of Marcellus shale taxes in the
commission’s plan of action, as well as the 10-by-10 strategy, are
critical. The gas industry needs to know that the commission is
policing the state’s streams, that it is working with the
Department of Environmental Protection on permitting and that it
can help drillers prevent problems in the first place, Arway
said.

But to so that, it needs more staff. And to get more staff, it
needs the money a severance tax will bring in.

To get it, the commission must make sure legislative leaders
know what it does, he added.

“A lot of times people don’t view the commission as part of the
conservation mix. Our job is to make sure they understand we are a
part of the mix,” Arway said.

“I think it’s important to keep that on the legislative
radar.”

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