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Natural Gas Impact Fee Brings Hope and Help

Jan 18, 2016

TWP_JAN16A recent report in Pennsylvania Township News is putting a spotlight on the major positive effects Pennsylvania communities are seeing as a result of annual impact fee payments. With a title of “Success Stories – Townships Rewrite Their Future with Impact Fee Funding” – the article starts out like this:

To say that Pennsylvania’s natural gas impact fee is making a difference would be an understatement. Once cash-strapped townships — some of which are receiving annual payments in excess of $900,000 — are back on their feet after years of financial struggles and investing in projects that were unthinkable before. As one township secretary puts it: “Act 13 changed everything.”

The piece goes on to explore what they call “the less frequently told story” about townships “many of them small, rural, and unaccustomed to dramatic change or growth…that sit atop this renowned geologic wonder…” It’s an eye-opening look at the remarkable, positive changes brought about by Pennsylvania’s four-year-old natural gas impact fee/tax; and how townships are utilizing funds that in years past, they couldn’t even envision receiving.

Many are rebuilding crumbling roads and bridges. Others are hiring police, helping local fire companies pay off equipment, and replacing antiquated, budget draining equipment. 

Act 13 has been a godsend,” says Priscilla Keeney, secretary for Rome Township in Bradford County, one of the epicenters of Pennsylvania’s natural gas boom. “For years, small, rural townships like ours have been struggling.  Now, we have some relief.”  

The article wraps up with reflections from the Rome Township secretary who hopes the Impact Fee stays in place, exactly as it’s currently employed.

“The impact fee is a fair tax, which is rare, and it’s also an economic stimulus, which is also rare tax. I can only hope that common sense prevails, and they don’t take it away.”

The Pennsylvania Townships News piece follows on the heels of a recent study released by the Center for Energy Policy and Management at Washington and Jefferson College. As part of that study, researchers looked at a three-year time period in Washington County – and their findings revealed that the economic impact of natural gas production on that county totaled Six Billion Dollars and approximately 20-percent of the county’s total economic output.    

According to the Marcellus Shale Coalition (MSC), natural gas producers in Pennsylvania have paid upwards of $856 million dollars in Impact Fees since 2011.   

ImpactFeeAnnual

The graphs below show where payments went in 2014 (the most recent year for which this data is available), by top receiving counties and then the dollar breakdown among top producers in 2014. 

 

It’s important to also note that Impact Fees represent only one tax that natural gas producers pay in the state of Pennsylvania.  There are many others.  According to the MSC:

Natural gas operators in Pennsylvania pay every other tax that is levied on other businesses, including the corporate or personal income, capital stock and franchise, sales and use, liquid fuels and other taxes. According to the Pennsylvania Department of Revenue, these taxes have generated over $2.1 billion in revenue for the Commonwealth of Pennsylvania over the last eight years, above and beyond the $856 million generated by the Impact Fee.

Read the Pennsylvania Township News article in its entirety here.

More Information on the Washington and Jefferson College Natural Gas Economic Impact Study can be found here.

Marcellus Shale Coalition Fact Sheet: Pennsylvania’s Impact Fee.