LOCK HAVEN - For the Keystone Central School Board, it's all about tax fairness.
This rural county plays host to what is expected to be a growing natural gas drilling industry, and should benefit from any tax revenues garnered from the mining of those resources.
Unfortunately, according to school board President Jack Peters and other members, the cash-strapped state government is looking at the potential tax dollars as a possible savior during difficult economic times.
There are several proposals afoot in the General Assembly to assess and tax such operations, but one of them provides that the local municipalities get just 4 percent of any collections, with the large majority of the revenue ending up in state coffers.
According to Peters, that's just not fair - especially when local governments are likely to pick up the tab when it comes to the increased truck traffic on local roads and other environmental impacts that arrive with drilling operations.
On Tuesday, the board unanimously approved support of the Pennsylvania School Boards Association legislation to reauthorize property assessment and taxation by local governments on both oil and gas operations - as it existed in the state for nearly a century prior to 2002.
"In rural areas, especially those hosting state game and forest lands, the local municipalities have a smaller tax base, and the state provides little beyond a very small, substitute tax stipend," Peters said.
"Now the state government wants to tax these resources at the state level ... The whole idea, the concept originated with local government," he added.
In 2003 the Pennsylvania State Supreme Court, in Independent Oil and Gas Association vs. Board of Assessment Appeals of Fayette County, removed that right to assess those natural resources, saying that oil and gas and other minerals "are not specifically enumerated as subjects of taxation in statute."
For the past several years, the PSBA has been supporting legislation to restore these rights to school districts and municipalities, particularly since the discovery of natural gas in the Marcellus Shale regions of Pennsylvania.
Now it appears that the state is accepting that initiative - on behalf of state government rather than local government, Peters suggested.
The PSBA points out that 45 of the 50 school districts with the highest aid ratios which means that they have the lowest relative wealth in the state are within the Marcellus Shale region.
Industry spokesmen, in the meantime, argue that the economic boom that the Marcellus Shale natural gas formation would potentially bring to Pennsylvania could be substantially slowed if an extraction tax is enacted.
Officials estimated that the average lifespan of a Marcellus Shale well could be 20 to 30 years.
Industry officials also say only 408 Marcellus Shale wells had been drilled in Pennsylvania to date. Projections indicate 300 to 400 new wells in 2009.
