February 28, 2010

A severance tax on natural gas extraction proposed by Gov. Ed Rendell is drawing the ire of local politicians and legislators, who say the state is trying to pad its coffers with resources that belong to rural Pennsylvania.

Rendell made the push for a 5 percent tax on the value of natural gas, plus an additional $0.047 per thousand cubic feet, when he announced his proposed 2010-2011 state budget on Feb. 9.

While the tax would raise an estimated $177 million in the first year, only 10 percent of that, or an estimated $17 million, would be returned to the municipalities and counties where the gas was harvested.

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