Haley Citrone
Cabot Oil & Gas
External Affairs Intern, Pittsburgh

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The Marcellus Shale Impact Fee has been a highly innovative and effective version of a severance tax. It has actually worked and put the money to proper use.

Created in 2012 under Act 13, Pennsylvania’s impact fee – or tax – is on track to generate nearly $1.7 billion, with nearly $400 million staying in the 10-county Northeast Pennsylvania region. The bulk of these funds have directly supported significant, community-enhancing projects, such as flood mitigation, park and trail restoration, critical infrastructure repair, among others.

Last month, Pennsylvania State Senator Gene Yaw joined the Marcellus Shale Coalition, Williamsport Chamber of Commerce and other regional leaders to discuss the benefits of the Marcellus Shale Impact Fee (Tax):

“The Act 13 impact fee is probably the most important piece of legislation for rural Pennsylvania in my lifetime,” Sen. Yaw said.  “All of us here can attest to the ongoing benefits in our region.

Read more here and watch the video below:

The following are just some ways that Act 13 has benefited communities in Northeastern Pennsylvania:

Susquehanna County

Cabot has had a large presence in Susquehanna County since we started operating in the Marcellus Shale region in 2009. When the Impact Fee was put into action in 2012, we knew that one of the significant projects Susquehanna County had been trying to fund was a new hospital. We decided to go even further than the Impact Fee and initially donated $1 million to the project, then offered the community a $1 million match opportunity.

The citizens of Susquehanna County exceeded our expectations and raised an impressive $1.2 million which we happily matched. This was followed by a $1 million grant from the Weinberg Foundation, which brought the county to $4.4 million in just four months to build the Endless Mountains Health Systems hospital.

In total, Susquehanna County has received over $35 million directly from the Impact Fee. Here is the word from Susquehanna Co. Commissioners Chairman, Alan Hall:

“The passage of Act 13 Legislation has had a huge impact on Susquehanna County … The positives from the Industry include but are not limited to a new Hospital in Susquehanna County due to the support from the gas companies.

Unemployment rates at an all-time low of fewer than 5 percent. Companies have contributed to the local college, and have played a role in the expansion of that College. They have also provided many contributions to several schools throughout the communities, when funding was limited from the State.

With the increase in the need for rentals, the industry has forced much needed housing projects throughout the County. Municipalities and the County have used funds to improve bridges, sewer systems, roads, parks, and equipment to name a few.

It has also allowed the entities the ability to free up other revenue streams to improve facilities, reduce debt, and prepare our communities for the future…

Without the impact fees the County, municipalities, and townships would be in serious trouble…

The loss of the Act 13 funding would mean deteriorating conditions throughout the County with roads, bridges, infrastructure, lost jobs, and large tax increases throughout.” (Testimony, 3/3/15)

Bradford County

Bradford County sits between Susquehanna, Wyoming and Tioga County. Bradford has received over $43 million through Impact Fees since 2011. The county has invested the funds into paying for broadband internet, building a memorial park, a playground and a community theater. The county commisioners have also used their funds to update county correctional facilities to ensure safety and reinforce the law in their community.

Tioga County

Tioga County is one of the counties where our employees live. Tioga County has accepted over $21 million in Impact Fees since 2011. It has typically used these funds to upgrade or invest in emergency preparedness and public safety. This includes new security cameras for Tioga County Prison, security software, a new 911 tower, and many more projects. Tioga County Commissioners were also able to invest a great deal in local law enforcement and fire departments.

In an unusual twist, the commissioners decided to commit some of their funds to giving cash advances to the Tioga County Department of Human Services employees, which were necessary due to a state budget impasse. This is some of what the commissioners had to say:

“The single most important benefit was having the ability to invest in our community as a result of the drilling activity. Act 13 made possible upgrades in areas until now that were not financially possible…

Thoughtful consideration of investment of Act 13 Impact fee is happening every day in Tioga County, focused on opportunities to overcome the challenges for the benefit of everyone. All 67 counties benefit from the Impact Fee. Act 13 is a good thing. It is working. It needs to stay!” (Testimony, 3/3/15)

Wyoming County

Wyoming County has received over $7 million dollars from Act 13 since 2011. Its commissioners chose to use their funds to better their judicial system and fix sewer systems and storm water systems.

Wyoming County Court House

They also used a good amount of the funds for Municipalities Planning Code (MPC) initiatives. As the Quick Guide to the PA Municipalities Planning Code indicates, the MPC has many purposes: to accomplish coordinated development; to guide uses of land, structures, streets, and public facilities; to promote preservation of natural and historic resources; to encourage revitalization of urban centers; to encourage consistency of comprehensive plans and land use regulations; and more. Here’s the view of Wyoming Co. Commissioner Thomas S. Henry

“The impact fee has been a definite help to our county and to our many small municipalities whose budgets just can’t handle the effects especially the wear on their roads.” (Testimony, 2/25/15)

These examples are only a fraction of the positive outcomes that have come to fruition through act 13. Here at Cabot, we look forward to continuing to give back to these communities through the impact tax.

The bottom line is that Pennsylvania’s current tax on natural gas – the impact tax – works.

“It is not only the $1.7 billion in impact tax that’s benefitting Pennsylvanians. Consumers are saving money, our air is cleaner, and billions of dollars have been invested in the Commonwealth…

The governor’s plan would pancake taxes on top of taxes rendering the state uncompetitive.” Marcellus Shale Coalition President, David Spigelmyer.

Reposted, with permission, from Well Said Cabot.