McGarrigle proposes severance tax on natural gas companies

Republican state Senate candidate Tom McGarrigle unveiled his plan to raise state education funding by levying a severance tax on natural gas companies.

McGarrigle said implementing a 4 percent severance tax on natural gas will generate $1.6 billion in new state revenue over the course of two years. The tax would raise $709 million in its first year and another $887 million in its second.

All of the funding would be devoted to public education, McGarrigle said. The revenue also would be required to supplement – not replace – existing education funding sources.

McGarrigle

Tom McGarrigle announces his plan to raise education funding by taxing natural gas companies.

“There is broad support from residents across Pennsylvania to create a severance tax on natural gas drilling companies,” McGarrigle said, who also is the chairman of Delaware County Council. “The difference with my plan is the entire 4 percent tax will supplement existing funding for basic education. That means more money being spent in classrooms to educate students.”

McGarrigle, of Springfield, is running against Democrat John Kane, of Ridley Township, for the open seat in the 26th Senatorial District. The seat is being vacated by retiring Republican state Sen. Edwin “Ted” Erickson, of Newtown.

Pennsylvania has the lowest effective tax rate on natural gas drilling companies among 11 states in the region, according to a study released last month by the state’s nonpartisan Independent Fiscal Office. Pennsylvania has not levied a severance tax, but has enacted an impact fee.

McGarrigle’s proposal would maintain the impact fee while also imposing a severance tax on Marcellus Shale drilling companies.

“We don’t want to overtax them and drive them out of Pennsylvania, but they need to pay their fair share,” McGarrigle said.

State Sen. Vincent Hughes, D-7, of Philadelphia, announced last month that he plans to introduce legislation to levy a 5 percent severance tax. His proposal would generate $720 million in its first year and earmark $375 million to education funding.

McGarrigle said he would back any plan that raises education funding by taxing natural gas companies.

“We should get behind good ideas, whether they’re from a Democrat or a Republican,” McGarrigle said. “School districts need more funding to educate these children. Whoever provides it – we should look for good ideas.”

Kane, the business manager of Plumbers Union Local 690, also supports levying an extraction tax on natural gas companies.

“I want to applaud Tom for standing with me and the Senate Democrats on the issue of adequately funding education by proposing a modest tax on natural gas extraction,” Kane said in a statement. “I’m glad that we both can bring support and publicize this idea, which has broad support among Delaware County residents.

“My only hope is that as the campaign progresses, my opponent continues to stand up for the interests of Delaware County instead of the interests of his party.”

Gov. Tom Corbett, a Republican seeking re-election, has opposed implementing a severance tax, arguing it would deter investment.

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2 responses to “McGarrigle proposes severance tax on natural gas companies”

  1. delco observer says :

    Sounds like more Delco GOP doublespeak…trying to be everything for everyone. A key question for Mr. McGarrigle is this-is what he is advocating support for true public education (meaning public schools) or for more money to be diverted to one of his and the DELCO GOP’s and Governor Corbett’s main patrons-Vaughn Gureghian and Charter Schools? More talk of vouchers? Will McGarrigle speak out against Senator Pileggi, whose plan is to just use the $ to freeze property tax and not divert more $ to the classroom, and Representative Adolph, who has not been a champion of the tax and using the dollars to increase public education funding? It is understandable that Mr. McGarrigle needs to distance himself from the failed Corbett policies, but will he have the strength of character to turn his back on Pileggi, Adolph, Corbett, et al? His track record is he will not, but is just using this issue for political posturing. If McGarrigle does have the intestinal fortitude, Democratic Senator Vincent Hughes has proposed a good plan that contains education $, redevelopment $, environmental $ and includes a new education funding formula. Representative Vitali has likewise proposed legislation. If Mr. McGarrigle really wants to get ahead of the curve and prove his bona fides, he needs to get himself on record supporting Senator Hughes and Representative Vitali instead of playing poitics.

    • pookie1 says :

      We need to FREEZE TEACHERS SALARIES for at least the next 5 YEARS to give the PUBLIC a chance to catch up .THEN POLITICIANS can say they understand their supporters lack of INCOME and JOBS. THE PEOPLE need some breathing room PLEASE think of THE TAX PAYERS

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