Area lawmakers cautious on proposed budget
While local lawmakers are optimistic about Gov. Tom Wolf’s proposed 2017-18 budget, a lack of funding for agriculture and changes to natural gas drilling impact fees have some worried.
“His tone was a lot less confrontational this year than last year,” state Rep. Garth Everett, R-Muncy, said. “It certainly seems like we will be able to find the middle when we aren’t starting so far apart.”
Everett, along with his fellow state representatives, received Wolf’s complete budget package Tuesday and Everett noted a lack of funding for various agricultural programs throughout the state, including the Penn State Extension, which is a source for many local farmers.
However, he said funding for these programs often is cut early in the budget process but inevitably the House of Representatives will work to put them back in. Everett said he is optimistic a compromise will be reached this year as well.
Wolf’s proposed 6.5 percent severance tax on natural gas production was adamantly decried by some, but cautiously accepted by others.
Everett said that while he will not support any measure that reduces natural gas impact fees to local municipalities, he is open to a different manner of collection. Everett said that currently the impact fees are collected based on the number of gas wells put on a parcel of land; however, the severance tax would collect a fee based on the amount of gas produced, instead of on the number of wells.
He said gas production has increased over the past eight to 10 years, while the number of new wells drilled is considerably less.
State Sen. Gene Yaw, R-Loyalsock Township, is opposed to Wolf’s severance tax proposal, calling it unrealistic.
“The idea of creating a new severance tax is completely impractical and a perfect example of bad public policy,” Yaw said.
“Simply put, we don’t need a new tax on natural gas extraction, because we already have a tax on natural gas in the form of impact fees,” he said
Fearing the possibility of diminishing funds, Yaw said the impact fees go toward projects such as statewide environmental initiatives, local infrastructure improvements, affordable housing and local community and recreation projects.
State Rep. Matt Baker, R-Wellsboro, also is concerned about the potential impact a severance tax would have on the natural gas industry.
“I have concerns about this tactic, given that some companies have already pulled out of Pennsylvania due to the ever-present threat of increased taxes upon these businesses and how those taxes impact landowners,” Baker said.
He cautioned that over-taxing the industry might hinder the state’s ability to be competitive with other states that also rely heavily on natural gas drilling.
Everett and Yaw are on the House and Senate appropriations committees and will begin public hearings later in February to go through the proposed budget line by line.
In addition to the areas addressed by the governor’s proposed budget, key issues such as state pensions and Medicaid failed to get attention.
State Rep. Jeff Wheeland, R-Loyalsock Township, cautioned that “the devil is in the details” and said that the budget numbers will be critiqued over the next few weeks to assess the details.
“The pension situation was left out,” Wheeland said. “That certainly needs to be addressed moving forward.”
Wheeland, Yaw and other legislators have been advocating for pension reform for some time but have seen little progress in the past few years.
Pensions are a major cost driver for the state, said Yaw, who added that funding for the benefits should be addressed.
For local House Democrats, the budget proposal shows a serious commitment to the working middle-class.
State Rep. Michael K. Hanna Sr., D-Lock Haven, said “this is really a jobs-and-families budget.”
“The proposal aims to continue the bipartisan progress Gov. Wolf and legislators made the last two budgets on increasing support for schools, and includes new investments in pre-K, Head Start and school breakfasts to serve more children,” Hanna said “It also boosts support for basic education, special education, and the 14 universities in the State System of Higher Education.”
The budget also includes training for modern technical jobs, as well as a one-stop site to help small businesses navigate state programs, Hanna said.