Philadelphia set to receive $1.3 million from natural gas drilling impact fee
10/25/2012 | Real Estate Blog
As a result of Pennsylvania’s new gas drilling law, the city of Philadelphia is set to receive nearly $1.3 million. That number was released on Monday by Governor Corbett’s office, along with the amounts every municipality and county will receive under the new law. The proceeds of the impact fee mostly go to the communities where drilling will take place, but some also goes to all counties for of conservation, beautification and other purposes.
Parts of the state without drilling, such as Philadelphia, are required to use the money to build or maintain greenways, recreational trails, open space and natural areas, and for water resource management projects, among other environmental projects. Drilling communities are supposed to use the proceeds to fix roads, water and sewer infrastructure. These communities have limited local zoning controls on drilling, and if its ordinances are too restrictive under the new law, they will not receive funding until those rules are revised. That part of the new law, however, has been challenged in state court.
So far, the state as a whole as brought in $204 million since the legislature passed the fee law earlier this year. Sixty percent of the money goes to drilling communities, while the rest goes to counties based on population.
Interestingly, while Philadelphia ranked among the top 10 of 67 counties for impact fee payouts, there is not any actual drilling within city limits. Philadelphia is set to receive $1.29 million, and the suburbs are set to receive a generous amount as well.
The impact fee is part of Governor Corbett’s effort to attract the drilling industry to the state and make Pennsylvania a leader in the industry. The impact fee was selected over a tax on drilling, despite criticism from many Democrats and environmentalists that an impact fee would only generate a fraction of what a tax would.
Needless to say, the law has been controversial, and it remains to be seen what the legal outcome of challenges to the law will be.
Source: Philadelphia Inquirer, “Philadelphia to get $1.3 million from Marcellus Shale impact fee,” Angela Couloumbis, October 17, 2012