…Among the many issues raised for states by the rapid development of fossil fuels, like the burgeoning Marcellus Shale gas boom in Pennsylvania, are two pressing fiscal issues: first, how to raise funds fairly from industry activities; and second, how to distribute these funds to mitigate local impacts while investing in economic growth.
Today, Pennsylvania is the only major natural gas state that lacks a severance tax. A loophole in state law also excuses natural gas development from local property taxes. The absence of these two critical revenue streams denies Pennsylvania the opportunity to apply the lessons of recent energy booms in the American West…