LEWISBURG — New revenue from natural gas wells on state forest land should be used to decrease property tax bills for residents of counties with state forest land, according to State Senate candidate Trey Casimir.
"This proposal could help reduce property taxes and give the local economy a much needed shot in the arm," Casimir said.
"New drilling will be taking place on state forest land," Casimir said. "There is simply no question about that. Bids have already been advertised by the State Bureau of Forestry. The only question is how this new money will be used."
"There is precedent for this in other states, and even here in the Commonwealth," Casimir said. "Alaska shares a portion of its oil revenues with its citizens and one quarter of the revenue from the sale of timber off of national forests is given to local school districts and municipalities as a payment in lieu of taxes, thus reducing the burden on local taxpayers."
"Since the state already has plans to send out tax rebate checks using proceeds from slot machine gambling, there would be little additional cost if gas-related rebates were added in for counties with natural gas leases on state forest land, making the total rebate amount higher," Casimir said.
Currently, natural gas leasing on state forest land brings in about $4 million in revenues, which is used to fund recreation and conservation projects around the entire commonwealth. Rising natural gas prices along with new drilling techniques have created a boom in drilling activity in counties overlying the Marcellus Shale, a massive geological formation running beneath the states of New York, Pennsylvania, Ohio and West Virginia.
Ted Borawski, chief of the mineral section of the State Bureau of Forestry, stated that gas leasing activity has reached "historic proportions" in Lycoming and Bradford counties. Pennsylvania's state forest system totals 2.1 million acres. Of that amount, there are currently 200,000 acres under lease for natural gas storage and another 100,000 for natural gas production. Borawski said he anticipates that an additional 75,000 acres will come under lease for gas production this year, with new revenues in the range of $2 to $4 million per year.
"This proposal represents a sharp break with current practice in which revenues from state forests in the 23rd State Senate District are distributed throughout the state," Casimir said. "What I'm proposing is that a portion of this money remain right here at home, where it could help struggling families by reducing their property tax bills."
"The State Forest system is managed with a variety of goals in mind," Casimir said. "Outside evaluators have determined that our state forest land is being managed in a sustainable way, and I do not expect that to change as a result of this proposal."
The revenue to fund this proposed local tax rebate would come from the sale of additional leases on state forest land and from the royalty payments generated from those leases when natural gas begins flowing from the new wells. The leases have already been put up for bid, but unless the legislature acts, the money will not come back to the counties where it was generated and will not be used for property tax rebates.
The Marcellus Shale could contain as much as 50 trillion cubic feet of recoverable natural gas, according to a recent study by researchers at Penn State University and the State University of New York at Fredonia.
The 23rd State Senate District is composed of all or part of five counties: Lycoming, Bradford, Sullivan, Union and Susquehanna. The district contains all or part of 5 state forests: the Tiadaghton, Loyalsock, Bald Eagle, Tioga and Sproul.