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Don't ditch Act 13

In Butler County, the Act 13 natural gas impact tax is working as planned. Numerous projects benefiting the community have already been funded with this tax that is paid for by the energy companies. It is very unlikely that the 5 percent severance tax on natural gas that Gov. Tom Wolf has proposed would be as effective in providing direct funding to Western Pennsylvania counties and municipalities.

Last year, Butler’s 57 municipalities received about $2.7 million and Butler County received $1.7 million from the state’s impact fees on Marcellus Shale drilling activity.

While the Local Impact Tax is often used to pay for projects that offset the impact of natural gas operations, such as road and bridge repairs, impact taxes are also being spent to benefit Butler County communities more broadly. For example, the county used money received through the legacy fund to improve Alameda Park and to support the Glade Run Lake restoration project. Evans City reduced its property tax rate for 2015 largely due to the borough’s natural gas revenues.

Wolf has said he wants Pennsylvania to adopt a severance tax. But he should first take time to see the benefits provided by the current local impact taxes. A thorough understanding of how Pennsylvania’s existing energy taxes are helping our communities ought to be a prerequisite to making any changes that could ultimately hurt our local municipalities and their residents.

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