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Saturday, October 23, 2010

Scarnati Answers Rendell's Statements On Marcellus Tax

Scarnati: Dems Not Focusing on Safety, Environmental Issues in Regard to Shale

WESB/WBRR News Director

When Governor Ed Rendell declared the Marcellus Shale natural gas extraction tax “clearly dead” on Thursday, he blamed Republicans and said they were not negotiating in good faith.

"It is irresponsible for Senate and House Republicans to refuse to compromise and simply turn their backs on these negotiations after days and weeks and months of work,” Rendell said in a news release.

But Senate President Joe Scarnati told WESB and The HERO on Friday that Rendell’s unilateral declaration that the tax issue is dead is “not how you negotiate. … He says we (Republicans) are not negotiating in good faith because we won’t move to his high tax.”

“When he’s looking at a tax that’s the highest in the nation, and we’re looking at a rate that promotes the industry, it’s pretty hard to come together,” Scarnati said.

Lawmakers had promised to have a tax bill in place by October 1, with the tax collection starting in January. Without the bill, the state is looking at a $70 million hole in the budget.

"Their clear unwillingness to change their previous proposal or to resolve differences with the House Democrats and with my administration makes it obvious that they have killed the severance tax in this legislative session,” Rendell said in the release. “It is a broken promise, as well as a misguided policy decision that will harm our environment, will leave our local governments without the financial wherewithal to deal with the impacts of drilling in their communities, and will increase the budget challenges that Pennsylvania will face in the years to come.”

But Scarnati told WESB and The HERO that Democrats, including Rendell, are so focused on the tax that they are not considering other issues like “… local zoning … safety – which the governor seems to forget about – environmental issues …, certainly environmental issues, and how much goes back to the municipality that has the impact from the drilling …”

“It’s extremely frustrating that the governor is focusing on the tax,” Scarnati said.

Scarnati explained that the House passed a bill that includes a tax that’s “twice as high as any other (extraction) tax in the country,” adding that negotiating is difficult when the Democrats’ goal “is to run the industry out of the state, and our goal is to have them not move their rigs out of here.”

Rendell “is the governor of Pennsylvania, not the dictator, and all his terms are not going to be met based on his conditions,” Scarnati said. “We have been very firm in the Senate. …Taxing this industry out of the state is not appropriate. … We’re willing to work toward a fair, equitable levy on this industry, but it can’t be one that drives them out of the state.”

Rendell is proposing a phased-in tax of 3 percent in the first year; 4 percent in the second; and 5 percent in the third. The Senate Republicans want a 1.5 percent tax rate, and they want the environmental and safety issues to be addressed.

“This isn’t about solving the budget deficit as the governor wants to do,” Scarnati said. “This is about enhancing an industry to make sure they stay and produce jobs.”

Scarnati said he’s looking forward to working with Republican Tom Corbett on the issue, should Corbett be elected governor.

Corbett is opposed to an extraction tax, saying it could stunt the growth of an industry he believes is a cornerstone of Pennsylvania’s economic recovery and could create hundreds of thousands of jobs. He also says tax money will be realized through the investments the industry makes in the state. He is, however, in favor of drilling companies helping municipalities with costs related to drilling.

Corbett’s opponent, Democrat Dan Onorato, is in favor of the extraction tax.


Anonymous said...

Tax them you freakin morons! The drilling companies aren't going anywhere!! Get you're heads out of you're #ss and quit worrying about how much money the gas companies are gonna contribute to you're campaign warchest!! How about doing you're jobs and looking out for the taxpayer!! Brad Jones

Anonymous said...

Gas in under $4 right now.
That is the lowest it has been in years. You can't just tax an industry out of the state. Contrary to what you think, they can be taxed out of the state.

Why is it when an industry moves into PA the first thing everyone says it tax the hell out of them?

Anonymous said...

If they can pay millions out in leases and high wages, they can afford a few pennies in taxes.

If we don't get gas tax, we WORKING citizen's will be forking over more in taxes to run PA.

Ohhh Sheepole said...

Ah yes, tax them! they cry, the politics of envy is alive and well.

You cant't believe the companies will just absorb any increased costs out of goodness of their altruistics hearts.

It is Joe & Mary Sixpac, who will pick up the tab.

The irresponsible fiscal folly in harrisburg, can't be solved by more tax dollars.

It's like giving a drunk a gallon of vino.

It's the republicans & democrats who created the budget mess, yet we keep electing them. we are fools that never learn.

Have the gas companies repair their damage & contribute directly to the Townships in which they work, keep Harrisbug out of it and vote for a third party.

Don't get sucked to far into this argument.

Anonymous said...

Don't tax the gas -- instead, take the money in ALL of the Pennsylvania campaign funds and give it to the taxpayers free from taxes. We need something for our pain and suffering over the past couple of years.

Anonymous said...

6;58, where the heck have you been buying gas that was over $4 a gallon - Europe??? Get your facts straight before you try to make an argument! Anyway, its natural gas, not gasoline and the taxes are already reflected in the market prices since every other state is already taxing this same activity. We are just giving these Texas based companies a free ride while they rape our lands. The profits aren't staying here, they are heading south.

Anonymous said...

These are WORLDWIDE investors.They are NOT leaving.Too much is invested and more to be gained.

Anonymous said...

Two years ago,(the producers)the companys that risk the huge amounts of exploration dollars to find and bring natural gas to market,were recieving $14 dollars per thousand cubic ft after expenses.
When the market crashed, taking with it much heavy industry and manufacturing,(Huge consumers of natural gas)the market price of saleable natural gas dropped to under $4 per thousand.
That amounts to an 80% drop (let me repeat that- 80% drop) in money recieved for their product after expenses!Profits at this level are almost non-existant.
All the exploration now, is being done on speculation.(Hopeing the market price will rise in the near future.)Huge investment,Huge risk!
Taxing the industry at this juncture is paramount to "Beating a dead horse!"
Common sense should tell you that we should be helping to feed this industry,with it's huge influx of capital into this dying area, until a time when profits rise and a tax on them makes sense!!!!
Come on people...Be glad for the influx of money to the area and lets not "bite the hand that feeds us" until there is some meat on it!

Anonymous said...

Were is this influx of capital? Maybe a few mineral rights owners are getting some royalties, a few hotels and restaurants are seeing a boost, but the average resident of this area sees no benefits from this drilling. However, they are impacted greatly by the risks!

Anonymous said...

If you have not, or can not see the influx of money already visible due to the start of gas exploration in this area;then one must assume you have a medical condition,are incarcerated,or spend all your time indoors.
There is more money being pumped into the Northern Pa. economy every day than there has been at any time since the turn of the century.
Nobody is going to come to your door and hand you a bag-full. The opportunity is out there,but you have to get up,get out,and "GO GET YOU SOME!"

Anonymous said...

Looks like the gas well drilling lobbists have found this site and are out in full force now to "sell" their side. I figured it would happen eventually.

Anonymous said...

Don't tax the gas companies!

They are almost out of profits!

They will up and leave us all!

And they also promise to pass on the taxes to us so don't do it or else!

It's so funny. People let the companies come in and have the way with our land.... make INSANE amounts of money, cut every corner they possible can (so what IS in that fraking water?... and how come all the out of state workiers?)

Then you watch tv. And the same people are paying money to have people tell you to FIGHT AGAINST THESE TAXES FOR XYZ REASONS!!!!

And then you run around, and contrary to your best interests and those of the rest of us that live hear, argue we shouldn't tax them.


Anonymous said...

Someone puts out some facts,and the best that can be done to counter them is more rhetoric.
Been here my whole life.Just want the people in this area to wake up!
You ALL want less invasive government, but you want to send more dollars to the S.O.B.'s in the capitol so they can spend it everywhere but here.
How did we make out on our timber when we let the state control it??
It has been nothing but a piggy bank for the south of the state.You PAY,they play.....
Time for us to stop riding the short bus!!!!When profits come back up,these people will re- invest in our area(it is in there best interest)The state is just looking for a way to keep funding the money grabs!