Tentative Agreement on Marcellus Shale Natural Gas Tax

Republicans to Democrats: Give us our Budget and we’ll give you your Gas Tax

HARRISBURG – Republicans and Democrats have come to a tentative agreement on the Marcellus Shale Gas Tax and the PA state budget. Senate Republicans say they’ll pass a natural gas severance tax by Oct. 1, if Governor Rendell can agree to their budget terms by this Wednesday’s deadline.

Currently the two parties have a budget difference of approximately $1 billion. The natural gas tax arguably could produce more revenue than the current budget deficit, although some have recently said proposed terms of the natural gas severance tax are more of a facade than an industry-whole tax, with an estimated 2/3 of gas wells being exempt from the tax.

Joe Scarnati, R-Jefferson, still remains skeptical and cautious of the deal. “We’re being extremely cautious in saying we have a deal,” said Scarnati.

He went on to say that the deal hinges on many elements, and that  they must all come together for any part of it to work. “Nothing is agreed to unless everything is agreed to,” said Scarnati today. “If we don’t have a budget to send to the House tomorrow evening, nothing is agreed to… certainly a severance tax won’t be agreed to.”

Republicans were hoping for a win by Republican Tom Corbett later this year, who completely opposes a natural gas tax, so that they could stall any legislation that would enact the tax, but they are now willing to concede if it means passing the state budget.