Tom Shepstone
Shepstone Management Company, Inc.

….

…. 

The Marcellus Shale Impact Fee (Pennsylvania’s severance tax) funds many things but few probably realize that includes housing projects.

The Marcellus Shale Impact Fee is Pennsylvania’s unique version of a severance tax on natural gas. Tom Wolf loves to say Pennsylvania has no severance tax, implying drillers are getting away with something, but that’s anything but true. We just call it a Marcellus Shale Impact Fee rather than a tax, but it generates lots of revenue (on the order of $200 million annually) and that money goes to a wide array of uses, including automatic grants to local governments for all sorts of projects, additional grants for special projects on an application basis and funding for the Commonwealth itself. Indeed, Tom Wolf likes to brag about it when he isn’t pushing for a severance tax.

What I’m talking back is this press release from the governor last week, a few excerpts of which follow (emphasis added):

Governor Tom Wolf today announced recipients of a new round of funding for housing programs made available through the Pennsylvania Housing Affordability and Rehabilitation Enhancement (PHARE) fund. The governor named 214 housing and community development initiatives in 67 counties that will share a portion of the total $45.79 million in PHARE funding. The PHARE fund, which is sometimes referred to as the state Housing Trust Fund, is managed by the Pennsylvania Housing Finance Agency.

“The PHARE program is successful due to its flexibility and its ability to leverage local partnerships and leadership to effectively address broad housing needs,” said Gov. Wolf. “It encourages local organizations and elected officials to come together and jointly decide the best way to enhance their community’s housing stock. PHARE is making a positive difference across the state.”

Funding for the PHARE program comes from three main sources. Since 2012, the program has received a portion of the impact fees collected from natural gas companies operating in the state with the goal of addressing the housing shortage caused by the impact of drilling. That is supplemented with two other funding sources that include a portion of the realty transfer tax and money from the National Housing Trust Fund.

Today’s PHARE funding is expected to impact nearly 2,000 Pennsylvania households…

“The current pandemic has demonstrated just how important affordable housing is and why we need more of it,” said PHFA Executive Director and CEO Robin Wiessmann. “Since its start in 2012, PHARE has proven to be an invaluable funding source to help communities address their most urgent housing needs.”

At least $32.4 million of the $45.79 million allocated today will be used to fund housing projects benefiting households with incomes below 50 percent of the area median income. That represents 71 percent of the awarded funding.

So, we learn, from the governor himself that there is, indeed, a severance tax in Pennsylvania and it’s helping house some 2,000 households, more than two-thirds of whom earn less than 50% of the median household income. That’s a $46 million investment in Pennsylvania’s future and it’s all because of the Marcellus Shale Impact Fee, Pennsylvania’s severance  tax. Thank you, Tom Wolf, for telling us the truth…for a change.