Warm weather and a saturated natural gas market have driven down the gas price and slowed the Pennsylvania natural gas industry.
Still, gas extraction has been a boon to local governments across the Marcellus Shale gas field. Due to the state Legislature’s refusal to place a fair severance tax on the industry, drillers instead have paid a “local impact fee” that is a fraction of what they would pay in a severance tax. Lawmakers also have directed most of the revenue from the tax to the rural counties and municipalities where drilling occurs, to ensure that only a tiny fraction of the proceeds goes to the commonwealth’s struggling urban areas.
The fees have generated about $850 million over four years, the majority of which has gone to local governments. State Auditor General Eugene DePasquale is on the mark in undertaking a comprehensive audit of how that money has been spent. According to the auditor general, $33.1 million of the money is unaccounted for due to inadequate compliance with state reporting requirements. That amount has grown each year that the impact fee has been in place and is a problem that must be resolved for the sake of accountability.
State law requires that recipients of the money report its use to the state Public Utility Commission but does not endow the PUC with enforcement authority to ensure compliance.
That is only one issue that the audit should address. It should detail actual uses of the money statewide so that the public and policymakers can assess the effectiveness of the impact fee. And it should detail whether local governments are sitting on large amounts of money that otherwise could serve public purposes.
The Legislature has badly mishandled the gas boom. Mr. DePasquale’s audit should be an instrument not just for accountability but for better public policy.
This article was from The Times-Tribune, Scranton, Pa. and was legally licensed through the NewsCred publisher network.