Morning Must Reads: Don't Settle for 'Chump Change' with Gas Extraction Tax

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Two Pennsylvania newspaper editorials are making the case this week for enacting a severance tax on natural gas drilling, like most large energy-producing states have.

The Philadelphia Daily News writes that the state's drilling impact fee is a small fraction of the total value of the gas being extracted and that after the 2014 election "the time will be ripe for Pennsylvania to decide that when it comes to natural gas, we shouldn't settle for chump change." A bit more from that editorial:

The Independent Fiscal Office, a bipartisan agency created by the Legislature, said that the money Pennsylvania gets from its drilling industry is the lowest of 11 natural-gas producing states that were studied.

The IFO said the state's current impact fee equals about one percent of the value of the gas extracted from these Marcellus Shale gas wells.

The revenue is much higher in other states, even in Texas and Oklahoma, which are known to be friendly to oil and gas interests. All of them levy taxes on the volume of gas extracted.

The Patriot-News/PennLive.com also penned an editorial supporting the adoption of a severance tax in Pennsylvania:

Pennsylvania has room to make gas companies pay more of their fair share for carting off this non-renewable resource, without automatically causing them to flee to other states.

How much room? In today's tight times, with the state struggling to find enough money to invest in schools and higher education, that’s the right question to be asking.

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