Washington County top recipient of gas impact fees for 2014

Posted June 10, 2015

Washington County and its municipalities led the state in reimbursements from impact fees paid by drillers in Pennsylvania’s Marcellus Shale in 2014, with the county receiving $6.5 million and its municipalities garnering $11.1 million for a total of $17.63 million, according to a list provided Wednesday by the Pennsylvania Public Utility Commission.

Greene County also was in the top five counties receiving impact fees, with $4.55 million for the county and $7.27 million for its municipalities for a total of $11.8 million.

The money is divided among the counties and the municipalities in them based on a formula that includes the amount of drilling activity.

According to the PUC, Washington County had a total of 1,164 wells drilled in 2014, while Greene County had 873.

According to a news release from the PUC, the final approved distribution statewide was $223.5 million in disbursements under Act 13 of 2012, which imposed an impact fee on natural gas producers. Over the past four years, the PUC has collected and distributed more than $855 million in impact fees.

The PUC said it expects checks to be mailed prior to July 1.

This year’s total amount was $2.25 million less than the $225,752,000 distributed for 2013. Despite this year’s lower distribution, both Washington and Greene saw their total disbursements go up from 2013’s amount, when Washington collected $16.2 million and Greene received $9.48 million.

Washington County’s $17.63 million in total distributions from the fees edged out Bradford County’s total of $17.3 million.

“We’re really pleased with the numbers,” said Washington County Commission Chairman Larry Maggi. “It gives us and the municipalities an opportunity to do projects we might not otherwise be able to do.”

“We’re taking care of our bridges, rehabbing roads and rehabbing infrastructure,” including water and sewers, the county airport and the court system, Maggi said.

Greene County saw a 20 percent increase in its Act 13 allocation. The county ranks fifth among counties in terms of the amount of money it receives in impact fees.

“The impact fee is, and continues to be, of great importance to the county,” Greene County Commissioner Chuck Morris said “This increase will enable the county to provide services that are needed throughout the county and assist with infrastructure and other needs.”

The county has used the bulk of the money for improvements to public buildings and other public infrastructure, to promote housing development and cover human services needs.

It also has attempted to partner with municipalities to advance local projects, Morris said. “We’ve tried to let them (local municipalities) know that if they have a project, we’re more than willing to match their contribution,” he said.

The county supports the position of the state’s county commissioners association in regard to continuing the Act 13 impact fee program as it is. “We like the system as it operates now,” Morris said.

Cumberland Township is the top municipality in the state in Act 13 allocation and expects to receive $918,147.

“We didn’t think we would be getting that much,” Supervisor Bill Groves said. “We’re pleased.”

The township had budgeted only about $400,000 for Act 13 money. “We thought it was better to be conservative,” Groves said.

Act 13 is a great benefit to the township, Groves said. “It enables us to do things in a year that normally would take two or three years to complete,” he said.

The township is able to tar and chip more miles of road, install more storm drains and do more blacktop projects, he said. It also uses the money for public safety, to help fund its police department and to assist the local fire department.

Cumberland Township also agrees the state should continue to provide the Act 13 impact fee funding. In regard to the boom in drilling in the Marcellus Shale, “We’re the one being impacted,” Groves said.

In Washington County, Amwell Township was the biggest recipient among municipalities, with a distribution of $725,380.

“Pennsylvania’s impact tax continues to work as designed, delivering millions in natural gas tax revenues to each and every county across the entire commonwealth,” said Dave Spigelmyer, president of the Marcellus Shale Coalition, which represents drillers and their supply chain partners in Pennsylvania.

“These tax revenues are essential to county and local government budgets, helping to stabilize and even lower taxes for Pennsylvania families. What’s more, these special natural gas tax revenues, more than $850 million since 2012, which are overwhelmingly sent directly to local governments rather than Harrisburg, are enabling important infrastructure and other vital community improvement projects.

“That said, while we continue to make positive progress, we cannot lose sight of the fact that these local community benefits are jeopardized by higher energy tax plans being considered by some in Harrisburg.”

Gov. Tom Wolf is proposing a 5 percent severance tax on unconventional or deep shale wells in the state. Wolf, who has pledged to use the proceeds to provide $1 billion for education in Pennsylvania, also proposed a levy of 4.7 cents per thousand cubic feet of gas extracted from the Marcellus Shale formation.

While enactment of a severance tax would end Pennsylvania’s current impact fee, which goes to municipalities directly affected by drilling activities, Wolf is proposing using a portion of the severance to provide $225 million per year to areas impacted by drilling.

Maggi said he and the other commissioners “want to keep the status quo” as far as the impact fees are concerned.

“We’re making good use of the money on worthwhile projects,” he said.