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State senator pushes for severance tax

April 2, 2014

HARRISBURG, PA — Pennsylvania State Sen. John Yudichak, on March 27, joined leaders in education, environmental protection and business at the Northeastern Pennsylvania Industrial Resource Center to unveil details of a plan to enact what he called a fair and reasonable severance tax proposal on the Marcellus shale industry.

“In order to fully capitalize on the benefits of the Marcellus shale industry, we must have a comprehensive economic strategy in place—and that strategy needs to include a fair and reasonable severance tax,” Yudichak said. “Fair taxes mean better jobs, better education and better environmental protection; and a severance tax would level the playing field for all Pennsylvania businesses to grow along with the Marcellus shale industry and ensure that we do not have to make drastic budget cuts to important state programs every June.”

The plan would levy a new 5% tax on the extraction of Marcellus shale gas, and the revenue generated by the tax would be used to fund education, protect the environment and stimulate the economy. It is estimated that the severance tax would generate $720 million in the first year alone.

Supporters of the severance tax point out that such a tax exists in every other state with shale gas extraction.