Rendell wants shale gas tax to help the budget

Governor Rendell wants to use $70 million of future natural gas severance tax revenues to help fill a gap in this year’s budget.

Rendell says his proposal is based on 40 to 50 percent of the tax revenue going into the state’s general fund.

Jan Jarrett of the environmental group PennFuture says she’s “ok” with that breakdown, as long as the rest of the money is used to fund environmental causes, and the municipalities and counties where the drilling is taking place.

Jarrett says she’s focused on making sure lawmakers don’t lose revenue by writing too many loopholes for gas drillers into the tax bill.

“They want to be exempt for the first couple years of production of a well,” she says. “And that’s exactly the time the well produces the most, and when the revenue is the greatest from a severance tax for those wells. So that’s something that we’re really concentrating on. Making sure they don’t get that exemption up front.”

Various bills have used different percentages, revenue distributions and production rates, and top lawmakers haven’t yet agreed to the framework of the measure they’ve vowed to pass by October 1.

Rendell says if the tax doesn’t become law this year, he’ll need to make another round of budget cuts, to compensate for the lost revenue.