Orwellian Tax Speak: Call It a “Fee”

Call it a “fee” or call it “knockwurst” if you like, but the latest proposal for a “local impact fee” on natural gas drillers is not only still a tax, but an unnecessary and punitive one.

While individuals and corporations should pay for the government they use, especially those companies that are clearly using and impairing taxpayer-funded assets, the fact of the matter is the natural gas industry is already paying more than their “fair share.” 

For example, according to a Penn State University analysis, the natural gas industry paid an estimated $100 million in state and local taxes directly from industry.  Moreover, the industry paid business taxes, individual taxes on wages, and taxes on royalties and lease payments of $289 million in 2009; will pay upwards of $100 million in royalties to the state from drilling on state-owned lands this year; $1.7 billion in royalty and signing bonuses to private landowners in 2009; $11 million to the Pa. Department of Environmental Protection in fees (which entirely pays for DEP costs of inspection); and, $200 million in local road repairs and improvements in 2010.

Despite calling it a local impact fee, 40 percent of the money from this proposal would be redirected to things not specifically related to “local impact.”  Therefore, this “fee” is really just another tax.  If this were truly a “fee” to pay for government services being utilized, then supporters would be able to identify what “impact” is not already being paid for and limit the cost of the fee to those purposes. 

Unfortunately, this is just another scheme to tax one of Pennsylvania’s only growth industries (other than government) to pay for years of overspending in Harrisburg.

NOTE: See the “More Info” page to read the “Marcellus Shale Impact Fee” summary from Sen. Scarnati.