Fiscal office: 2018 impact fees hit record high

January 25, 2019

Rick Shrum
Observer Reporter

Impact fees on unconventional natural gas operations in Pennsylvania hit a single-year high in 2018, according to the state’s Independent Fiscal Office.

IFO, which does revenue projections and budgetary analysis for the Legislature and Pennsylvania residents, said in a research brief Thursday that gas wells that were drilled or operating last year generated $247 million in impact fee revenue.

That, according to IFO, was about $23.5 million above the previous high of $223.5 million in 2014, the first year impact fees were disbursed. The estimated 2018 figure was $37.4 million more than the $209.6 million in fees from 2017, an 18 percent increase year over year.

The office used data published recently by the state Department of Environmental Protection. Production information was available through November; DEP estimated the December figure.

Impact fees were created when Act 13 of 2012 became law, and are distributed to local governments and state agencies for use on infrastructure, emergency services, environmental initiatives and other programs. Money from the 2018 fees will be distributed statewide in April.

These funds go to individual governments based on the number of horizontal wells inside their boundaries or their proximity to areas where natural gas was extracted.

Although the IFO data is an estimate and specific impact fee figures will not be available for months, this potential revenue record could be a harbinger of good things for Washington and Greene counties and their municipalities.

A full 24 percent of that $209.6 million in impact fees collected in 2017 and disbursed last year went to towns and counties in Southwestern Pennsylvania. Of that $50.2 million, $33,264,045 – 66 percent – ended up in Washington ($19.9 million) and Greene ($13.4 million), which ranked first and second in the southwest corner.

In revenue distributed strictly to county governments, Washington ($7.3 million) ranked first and Greene ($4.9 million) fourth among the commonwealth’s 67 counties.