KING OF PRUSSIA, Pa. (CBS) – The issue of whether to impose a severance tax on companies looking to drill in Pennsylvania’s Marcellus shale was front and center today at a Pennsylvania House hearing in Montgomery County.

Pennsylvania state representative Greg Vitali of Delaware County is pushing legislation that would levy a gas extraction tax slightly lower than that of West Virginia.  The revenue would be split three ways: a third for the state’s general fund, a third for environmental groups, and a third for local governments.

Republicans worry that the tax will chase the drillers away, prompting an exchange between Democratic state representative Josh Shapiro and Michael Wood of the Pennsylvania Budget and Policy Center.

(Shapiro:)  “When they put these severance taxes in place — I’m assuming all the drillers left those states, right?  To go to other states?”

(Wood:)  “That ends up being the issue.  Obviously, the resource is in the ground, there’s really no other place to get them, so the gas doesn’t move to follow the drillers to other states — no.”

Vitali says a recent poll shows that 63 percent of the people support the tax. He says Gov. Tom Corbett should consider the tax if he wants to do the will of the people.

Reported by Brad Segall, KYW Newsradio 1060.

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