Harrisburg – Sept. 2, 2015 – State Sen. Jim Brewster (D-Allegheny/Westmoreland), who has authored a plan to tie a shale extraction tax to education, said today that budget negotiators must focus their efforts on a responsible shale tax to restore education funding.

“Increased education funding from a sustainable resource needs to be a priority in this budget,” Brewster said. “We can make a real investment in our children by using responsible shale extraction taxes to help pay for new books, technology and programs while cutting our reliance on local taxes.”

Under Brewster’s Marcellus Shale tax plan, called “Extraction for Education,” a shale tax levy would be layered over the current Act 13 impact fees. The effective rate of the new extraction tax combined with the Act 13 fee would be 5 percent.

“We need to find a resource that can pay for a real investment in schools,” Brewster said. “Proper funding of education via a shale tax should not be put back in the line of issues that budget negotiators are dealing with as they attempt to find compromise.”

The state budget is now more than two months overdue. In June, Republicans pushed through the General Assembly a state budget that was vetoed by the governor. The GOP budget plan did not include a shale tax and only boosted new education funding by a net $8 million. The recent focus of budget negotiators centered on a discussion of pension reforms.

Brewster said that he estimates that the energy levy he is suggesting in Senate Bill 395 would raise $700 million, depending on the price of gas. His plan calls for revenues generated from the tax to be distributed via the new basic education funding formula that was devised by the Basic Education Funding Commission.

“Before we push new resources out to school districts that have been hit by the combined sledgehammer blows from a cumulative $3.4 billion in Corbett administration cuts and charter school issues, we have to ensure that a reliable funding stream is available to maintain the investment in education and build up a responsible funding level,” Brewster said.

The McKeesport lawmaker said it is also critical that Act 13 payments to local governments be sustained in any shale extraction tax plan that is being developed. He said Senate Bill 395 would keep those payments in place.

“As a person who spent more than a generation in private business, I know the importance of reasonable tax rates and constancy in how taxes are structured,” Brewster said. “My ‘Extraction for Education’ plan provides reasonableness and consistency and it will be levied at a rate that will not hobble the industry.”

Brewster said it is important for the shale industry to blossom and continue to employ Pennsylvania workers. His belief is that a 5 percent shale tax would not be out of line in comparison with other states. He said a shale tax levied at 5 percent would enable gas drillers who have wells in Pennsylvania to remain competitive.


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