Impact fees top $16M in county

BY JON O’CONNELL
Times-Shamrock Writer

The seven-county region is set to receive more than $20 million from unconventional gas well impact fees, according to preliminary numbers from the state Public Utility Commission.

An analysis of PUC documents provided to The Times-Tribune found Susquehanna County can expect about $16 million and Wyoming County about $3.6 million, with other northeastern counties receiving a much smaller share of the total $127.2 million to be distributed from the impact fee.

The PUC doesn’t plan to post the impact fee distribution information on its website until it gets confirmation that checks are ready to be sent to municipalities, said agency spokesman Nils Hagen-Frederiksen.

He said there have been minor adjustments made to numbers near the end of this process in previous years. The posting could happen later this week, he said.

Drillers pay no tax on the gas they produce, but pay an annual fee for each well they put in the ground.

Of that money, Harrisburg takes its cut, $25.5 million off the top, to fund state agencies that regulate the industry and then divides the remaining funds around the state.

Counties that actually play host to drilling get 60 percent of what’s left, with each municipality receiving money for each well in its borders.
Counties with no drilling, like Lackawanna and Luzerne, receive the remaining funds from what is called the Marcellus Legacy Fund. This money must be used for community or conservation-minded projects.

Lackawanna County is to receive $205,082 and Luzerne County, $306,863 from the Marcellus Legacy Fund.

In Springville Twp., Susquehanna County, which is to receive the largest lump of cash of the Susquehanna County municipalities, township supervisor Duane Wood said while they set a sum for savings, much of it goes right into infrastructure projects.

The township has 2¼ miles of road that need to be repaved this year and two lengths of storm drain that must be replaced.

“Around here, that’s what we’re doing with this. … That’ll shoot a big chunk out of it,” Wood said of the $887,000 marked for his town.

It’s much of the same 5 miles south, in Washington Twp., Wyoming County, which is to receive $460,000.

Township supervisor Dan Huff said officials try to spend all the gas money promptly. Like many other municipalities, they treat the impact money more like a bonus instead of a revenue stream.

“If you’re using money to build up extra staff, give raises, anything like that, when that does dry up, then you have problems,” Mr. Huff said. “Because your dependency on that’s there, and your income’s gone.”

Drilling activity in Washington Twp. has subsided lately, evident in the smaller royalty checks leaseholders receive each month, Mr. Huff said.

It’s for that reason he believes the impact fee system, rather than a tax, works better for small towns, because they’re guaranteed a check every year and not dependent on the market.

Gov. Tom Wolf has proposed a 5 percent severance tax on natural gas’ wellhead value. Mr. Wolf’s plan would maintain an impact fee returned to host communities through the tax, but Mr. Huff was worried it wouldn’t stay that way.

“My fear is it will get funneled away from the counties up here that are getting the impact,” Mr. Huff said. “That’s historically what seems to happen. … Then we’re left with the impact and no way to keep up with it.”