2018 Impact Fees Estimated to Reach Record High

From PA Chamber of Business & Industry

Pennsylvania’s existing, competitive impact fee tax structure is paying dividends for the Commonwealth.  The latest proof – a report from the state’s Independent Fiscal Office that shows the impact fee is set to produce $247 million in revenues for 2018 – $37.4 million more than was collected in 2017 – and which will be remitted in April of this year.  If this estimate is accurate, it will be the largest-ever annual revenue amount generated by the tax since its inception in the Corbett era.  The second-highest annual revenue amount would have been $223.5 million, which was generated in 2013. 

According to the IFO, the increase is due in part to activity from new wells and from collections from previously disputed wells and outstanding payments.  The Marcellus Shale Coalition responded to the positive report by saying that it shows the tax is working as intended.  “Pennsylvania’s tax on natural gas, the impact fee, is working as designed and an important revenue source for statewide environmental and conservation programs, as well as communities in all 67 counties,” MSC President Dave Spigelmyer said.  “This report, along with strong support from local leaders, demonstrates the benefits and effectiveness of the tax … Additional and higher energy taxes, as some in Harrisburg have continued to misguidedly pursue, jeopardize these local benefits and will be shouldered by hard-working Pennsylvania families through higher home energy costs.”

While Gov. Wolf has publicly admitted that Pennsylvania’s natural gas industry is a benefit to the state’s economy, he has also repeatedly pursued another severance tax on natural gas companies.  The PA Chamber continues to lead a broad-based coalition against this proposal because it would jeopardize the continued growth of the industry and would otherwise limit drilling activity, which has generated so much local revenue through the impact tax.