Gov. Wolf believed he could sell his tax by showing how it would benefit education. After being sworn in, he began to campaign with an early 2015 visit to a school in one of the state’s poorest school districts, Chester County. He argued for a tax of 5% of the value of gas at the wellhead, plus 4.7 cents per thousand cubic feet. He estimated this could bring in around four times the revenue as the existing “impact fee,” and he said that the “lion’s share” of the estimated $1 billion in revenue would go directly to schools. The effort ultimately failed, and a similar effort to push a 6.5% severance tax in 2016 also failed.
In recent days, Gov. Wolf has made clear that he intends to try again. He will not say exactly what his proposed tax will be this year, but he says he is making a bigger push to sell the idea in communities far from drilling. He is arguing, for example, that Philadelphia suburb counties like Delaware and Chester should support the tax because it will bring money into their school systems in a way the current impact fee is not. That is because much of the impact fee revenue goes to the local community that is being “impacted” by the drilling. Gov. Wolf points out that the Philadelphia suburbs are organizing against various pipeline projects and severance tax revenues could help garner more support for the industry.
Regardless of the tax situation, gas prices are expected to tick up slightly this year and the Pennsylvania-based experts at Cimmaron Land are standing by to help with all your leasing needs.