Shale group: Rendell tax unfair, Pa. laws outdated

The natural gas industry in one of the nation’s hottest exploration spots is bracing for a political tussle over whether and how Pennsylvania will tax methane from the potentially lucrative Marcellus Shale formation.

An industry trade association, the Marcellus Shale Coalition, said Thursday it wants any discussion of a tax to involve the high cost to drill a shale well and cumbersome state laws that make it costly to operate.

A tax enacted without addressing issues that hamper exploration companies could encourage some to move resources to shale formations in other states, said coalition president Kathryn Klaber.

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“What is important is to look at the broad issues, not just a tax, as to how we make this climate best for growth,” Klaber said. “There are a lot of modernization policies that need to be put in place to develop this massive natural resource.”

On Tuesday, Gov. [Read the full article]

South Dakota cities failed Thursday in their bid for authority to impose an extra penny sales tax to pay for special projects or upgrades in roads, water lines and other service facilities.

The House Local Government Committee voted 10-3 to reject the measure after lawmakers said taxes should not be raised while the economy is struggling.

Rep. Val Rausch, R-Big Stone City, said taxes should never be raised unless government has no other option.

Opponents also argued that cities already can raise money for special projects or other services by voting to exceed state limits on property taxes. An extra sales tax would hit low-income people harder than wealthier people because they spend most of their income on goods and services subject to the sales tax, they said.

Cities can impose a general sales tax of up to 2 percent, with the option of a third penny on lodging, alcohol, food and entertainment. [Read the full article]

Gov. Tim Pawlenty spent the first seven years of his tenure skirmishing with Democrats over his drive for tax cuts and smaller government. With just 11 months before a possible move onto an even bigger political stage, Pawlenty made clear Thursday he’ll pursue more of the same, calling his vision “the true source of economic recovery.”

In his final State of the State speech, the Republican governor urged legislators to pass a mix of tax cuts and tax credits to spur job creation. Pawlenty, who isn’t seeking a third term as he likely explores a presidential bid, said Minnesota is “challenged, but our spirit is resilient.”

Pawlenty noted many state residents fear for their jobs, and said he knows how they feel — telling a story of being “scared and confused” as a teenager when his father lost his job with a trucking company.

“Many Minnesota moms and dads, and their children, are experiencing those types of feelings now,” he said. [Read the full article]

Gov. Ted Kulongoski hoped to make changing the state’s unique ‘kicker’ tax rebates one of his last hurrahs, but it turned out few others were cheering along.

The Democratic governor issued a terse statement Thursday saying the Legislature’s leadership, from his own party, had told him that kicker reform was out, at least for the four-week session now under way.

“The people of Oregon deserve better,” said Kulongoski, serving the last year in his two terms as governor. State law forbids him to run for a third, consecutive term.

The kicker rebate sends money back to taxpayers when revenue collections are more than 2 percent above projections. The rebates often go to taxpayers before Christmas and have proved popular enough for voters to put the kicker in the state constitution.

Kulongoski wanted to send voters a proposal to put some of the surplus collections into reserve funds. [Read the full article]

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