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Rendell says natural gas severance tax is dead

Friday, October 22nd, 2010

Governor Rendell has given up hope that a natural gas severance tax will be passed into law while he’s still in office. Rendell says the tax on natural gas extraction is “clearly dead” in 2010, since Senate and House leaders have failed to make any headway in negotiations.

Press Secretary Gary Tuma faults Senate Republican leaders for sticking to a tax rate of 1.5 percent, which would eventually increase to five percent.

Tuma says the Republicans’ rate is unacceptable.

“They simply came back and reiterated their same position,” he says. “They did not budge from that position at all. So that makes it clear that they are not negotiating in good faith. They are not negotiating at all. They are simply saying it’s our way or the highway.”

Senate Republicans are also insisting the House re-pass a severance tax bill before the election – an action House Democratic leaders have ruled out.

A staffer for Senate President Pro Tem Joe Scarnati says, “if the governor is walking away from the table, there’s nothing [Senate Republicans] can do.”

This year’s budget counts on $70 million in severance tax revenue.

Tuma says the gap will likely be filled with additional cuts.

A Senate Republican spokesman concedes a severance tax is “very unlikely” this year, but says the caucus is willing to continue talks.

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