Marcellus shale counties want more of the cut when it comes to severance taxes in a bill that’s being considered by the state legislature.
The bill, which was placed into a subcommittee by House Judiciary Committee Chair Tim Miley, D-Harrison Friday, would give the counties where the natural gas is produced more of the severance taxes once a threshold is met.
The bill says when the severance tax for natural gas brings in more than $64.8 million in any one given year to the state everything over that would be further divided with the counties where the wells are getting more of the money.
Severance tax revenues are already spread to counties across the state with producing counties getting more, just like coal producing counties do, but the new fund would be a greater advantage for the Marcellus counties.
The $64.8 million threshold hasn’t been met but the state Tax Dept. says it could be exceeded in the next budget year. The department is predicting $78 million in severance taxes then and as much $107.5 million by the 2014-2015 budget year.
The bill says the additional revenue coming to the producing counties could only be spent on infrastructure projects.
Natural gas industry lobbyist Phil Reale urged House Judiciary Committee members at Friday’s meeting to seriously consider the consequences of such a move. He says lawmakers would essentially be removing a significant amount of general revenue funds that “you may need over the next several years.”
Reale also reminded committee members Marcellus shale counties are already benefiting greatly from property taxes in relation to the gas drilling business.
“Marshall County is talking about lowering their levy rate because there has been so much production they’ve got more money than they know what to do with,” Reale said.
The judiciary subcommittee will report back to the full committee later in the legislative session.