Pennsylvania budget passes without gas tax

Lawmakers postpone debate on drilling industry levy until fall

A belt-tightening $28 billion budget for Pennsylvania is on its way to
Gov. Ed Rendell following passage by the state House Wednesday afternoon.

The budget deal does not raise any new taxes. That’s bad news to those who want to start raising taxes from the state’s boom in natural gas drilling.

It looks as though Pennsylvania will remain the only state without a severance tax on natural gas, at least for now.

Lawmakers have pushed off a decision on how much to tax the industry until the fall.

State Rep. Greg Vitali, a Delaware County Democrat, supports a severance tax. He says industry lobbyists who donate to campaigns are behind the delay.

“The gas drillers know that every month they delay this, it just saves them lots of money,” he said.

“The nature of gas drilling is such that over half of the gas comes out of the well in the first two years,” Vitali said. “So, the longer they can delay this, the more money they will save and the less money that will go to the Commonwealth.”

Vitali says he worries about a tax vote too close to Election Day.

But state Sen. Jake Corman, Republican Senate Appropriations chairman, says the delay means the tax rate will be based on good policy, not as a way to balance the budget.

The budget passed both houses before the end of the fiscal year Wednesday, putting the state on track for its first on-time budget in Rendell’s eight years in office.