By Julia Haggerty, Ph.D., Headwaters Economics— Fossil-fuel booms such as the one surrounding the Marcellus Shale in Pennsylvania raise two pressing fiscal issues for states: how to raise revenue fairly from industry activities, and how to distribute it effectively. But Pennsylvania is the only major natural-gas state without a severance tax, and a loophole in state law also excuses gas developers from local property taxes. The absence of these revenue streams will prevent Pennsylvania from applying the lessons of recent energy booms in the American West.
Headwaters Economics, an independent, nonprofit research group based in Montana, has studied energy and fiscal policy at the county and state levels. Our research shows how Pennsylvania could avoid the mistakes of other states and benefit from its natural-gas supplies……
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