Rep. criticizes gas fee, Corbett budget, visitors bureau
State Rep. Rick Mirabito, D-Williamsport, said that Pennsylvania’s legislation that generates impact fees from natural gas drillers doesn’t go far enough and that the state has lost out on at least $800 million in severance taxes from the industry since 2010.
The legislator made his remarks Monday at a meeting of the Williamsport Rotary Club at the Genetti Hotel.
Mirabito said that Act 13, which, among other things, provides a funding mechanism from natural gas drillers to the state and local municipalities where drilling activity occurs based on the number of a company’s wells and where they are located.
He said the fees paid by drillers are “neither local or impactful.”
Of the money paid by gas companies, almost half is disbursed outside of the area, according to Mirabito.
“We end up at the end of the day with about 47 percent going out of the area,” he said.
Pennsylvania, like 38 other states, also should have instituted a severance tax on drillers’ production, he added.
The state remains the largest gas-producing state without a severance tax. Mirabito said Pennsylvania has missed out on nearly $1 billion from the potential tax, according to reports he has seen.
“Sarah Palin had a tax on oil and gas in Alaska,” he said.
In addition, no provisions were made in Act 13 for Pennsylvania residents to have access to natural gas. The majority of residents – 57 percent – don’t have access to the natural gas that is harvested from under the ground where they live.
“This is a major problem,” Mirabito said.
Legislation is pending in the Senate, however, to expand natural gas service to more schools, businesses and residential areas.
Mirabito also said that Gov. Tom Corbett’s funding plan for education and human services have been “devastating.”
He said that cuts to education have a greater impact to school districts in rural Pennsylvania compared to more wealthy districts in southeastern Pennsylvania.
Mirabito also called for the closure of loopholes that allow corporations to pay less in business taxes.
He said that most large corporations only pay 2 to 3 percent of the state’s 9.9 percent corporate income taxes because of a business loophole.
The legislator once again called for more transparency and accountability on behalf of the Lycoming County Visitors Bureau and its relationship to the Williamsport/Lycoming Chamber of Commerce and how county hotel taxes are used.
Mirabito devoted a town hall meeting in late February to the subject. He said he became involved because he is concerned how public tax money is being spent and because numerous constituents were concerned about use of the bureau’s visitor information center on William Street.
He said residents became upset because they were required to be a member of the chamber or visitors bureau in order to place marketing materials there.
“I believe it’s important that public tax dollars not be conditioned that people join or play,” Mirabito said.
He said that he remains concerned about how more than $5 million of hotel tax money was spent in the past 12 years.
Lycoming County adds a 3 percent tax on hotel bills. Ten percent of that goes to the county for administrative uses. The remainder is used for local tourism promotion, grants and salaries.
“What did we specifically do with it?” he asked.
Mirabito questioned what he said was $63,000 given to the defunct Williamsport Outlaws professional hockey team by the visitors bureau.
“We don’t know what due diligence was done, if any, before giving it out,” he said.
He also called for the visitors bureau to be separated from the chamber. Of the state’s 49 tourism promotion agencies, just three are affiliated with a chamber of commerce. The Lycoming County Visitors Bureau and the Clinton County Economic Partnership are two of the three.
“I have always said we need an independent visitors bureau,” Mirabito stated.
He added that he is not opposed to increasing the county’s hotel tax to 5 percent, but is hesitant to take action in Harrisburg now.
“I can’t see increasing a tax unless we know where the money is going in the first place,” he said.
Mirabito said that an increase in the hotel tax “would give everybody a chance to benefit from the Marcellus Shale.”
The legislator is planning a town hall meeting at 6 p.m. Thursday at the Loyalsock Township Volunteer Fire Co., 715 Northway Road.