Proposed Drilling Fee May Piggyback on Budget Bill

- Proposed Drilling Fee May Piggyback on Budget Bill

Thursday, June 16, 2011
Knight Ridder/Tribune Business News
by Brad Bumsted, The Pittsburgh Tribune-Review

A Bucks County legislator said she will try to attach her proposed impact fee on deep natural gas wells to a budget companion bill that allows the state to raise revenue.

Her bill normally would have difficulty maneuvering through legislative committees in the two weeks remaining before summer recess. By offering it as an amendment to the budget companion bill, state Rep. Marguerite Quinn, a Republican, hopes the governor could sign it into law with the budget.

Quinn said she initially planned to hold back her bill out of respect for Republican Gov. Tom Corbett, who wants to consider an impact fee after his Marcellus Shale Advisory Commission issues a report in late July.

But because the GOP-controlled Senate appears ready to move impact fee legislation before the June 30 budget deadline, Quinn said she wants to try to enact H.B. 1700.

She has bipartisan support for her plan to assess $50,000 per well in the first and second years, declining in subsequent years; 35 co-sponsors signed onto her bill, including House Appropriations Committee Chairman Bill Adolph, R-Delaware County.

The companion budget bill is the state fiscal code that sets tax rates, and without it, the state could not raise revenue or, ultimately, spend money.

Kevin Harley, Corbett's spokesman, said Tuesday that Corbett intends to wait for the advisory panel's report so that he knows the potential impact on communities. Corbett has said he wants any money from a fee to pay for community needs that arise from drilling.

Quinn's bill would allocate 50 percent for local governments, 5 percent to county conservation districts, 20 percent for the state Motor License Fund and 25 percent for state environmental spending.

She said her plan abides by Corbett's desire not to put impact fee money into the General Fund.

A recent statewide poll found that Pennsylvania voters said by a margin of 69-24 percent that gas extraction from deep wells should be taxed.

"I believe this is a common-sense, balanced approach to address the variety of issues our local governments and communities are experiencing," Quinn said. "It will address the infrastructure and the environment (and) yet not prevent the growth of this industry."

If lawmakers attach a shale tax amendment to the fiscal code, and Corbett holds to his timetable and criteria, it could set up a gubernatorial veto and jeopardize timely passage of the budget.

Copyright (c) 2011, The Pittsburgh Tribune-Review

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Credit Suisse Lowers U.S. GDP Forecasts for First Half 2011

Credit Suisse Lowers U.S. GDP Forecasts for First Half 2011



Credit Suisse has revised down its U.S. GDP forecasts for the first half of 2011. The firm now expects 2.5% real GDP growth in Q1, down from its previous forecast of 3.5%. Its Q2 forecast was also revised down to 3.3% from 3.7%. However, the firm's 2011 second half forecasts remain unaltered at 3.8% and 4.0% for Q3 and Q4, respectively. Credit Suisse expects full year 2011 growth of 3.4% on a year-over-year basis and 3% on an annual average basis. This is down from its previous estimate of 3.8% and 3.3%, respectively. The firm sees 4.0% real GDP growth in 2012.

Credit Suisse issued a statement saying: The first quarter's forecast revision is mostly due to current quarter accounting. The monthly building blocks that add up to GDP have consistently printed below expectations this quarter, defying the much rosier readings from other parallel evidence on the economy (such as the ISM surveys). The list of GDP "source data" disappointments includes home sales, housing starts, capital goods shipments, non-residential construction, federal spending, and a sharp increase in the trade deficit. Most importantly, the GDP's largest building block - consumer spending - is slowing sharply on a sequential basis, on track for less than 2% growth in Q1, compared to 4% growth in Q4. Our revision to second quarter growth is partly a consequence of higher oil prices and the negative effect on real income growth. Consumer confidence gauges also fell sharply in March, presumably due to higher gasoline prices. Another reason for our Q2 downgrade is housing, particularly the 22% plunge in February housing starts. Falling starts will impact future readings on construction outlays and the associated GDP component - residential investment.

Budget fuel price call by Welsh Tories and Lib Dems

23 March 2011 Last updated at 06:44 GMT

Chancellor George Osborne has been urged to help Welsh motorists with fuel prices when he delivers his Budget.

Mr Osborne has hinted that he may scrap a fuel duty rise due next month.

Conservative assembly group leader Nick Bourne said he had "to do what's right by the country" and hoped he could act on fuel.

The Chancellor has faced calls for action after a sharp rise in petrol prices

Welsh Liberal Democrat leader Kirsty Williams said household budgets were under pressure and called for the fuel duty increase to be scrapped.

The Tories and Lib Dems said the UK government had laid the foundations for economic growth by dealing with the deficit.

But the Welsh Assembly Government said spending cuts were too deep and too fast.

On Sunday, Mr Osborne told the BBC's The Andrew Marr Show that he was "looking very carefully" at freezing the duty in Wednesday's Budget.

With uncertainty in the Middle East and Libya contributing to increased oil prices, the cost of petrol has risen sharply.

Motoring organisations have called on the government to scrap the planned rise in duty. It is due to take effect in April when it will go up by inflation plus 1p, making a total rise of about 4p per litre.

The Welsh Lib Dem leader said last year's Budget was "difficult... but it laid the foundations for the sustained economic recovery that Wales needs", she said.

"Fuel duty is now a real issue for so many families, particularly in rural Wales," she added.

The Wales Office has asked the Treasury to cut the cost of petrol by up to 5p a litre in rural Wales.

Minister David Jones recently revealed that he asked for a proposed fuel duty rebate scheme to be extended to the Welsh countryside

Growing the economy

But Welsh Assembly Government Finance Minister Jane Hutt said: "My main message to the chancellor is that the cuts are too fast and too deep and they are putting families, communities and businesses at risk in Wales."

She said the Budget needed to take action to stop the UK sliding back into recession, adding: "We need to see that there is a clear plan for growth and jobs."

Prime Minister David Cameron has rejected claims that Wales has been unfairly targeted by spending cuts.
Plaid Cymru said the Westminster coalition government should have concentrated on growing the economy instead of cutting spending in its first budget last year.

Plaid MP Jonathan Edwards said: "Quite simply, they got it the wrong way around."

Trade union Unison said its research showed last October's spending review could deprive the Welsh economic of £3.6bn and warned of 52,000 job losses, with half coming from the private sector.

Unison Cymru secretary Paul O'Shea said: "The view that the private sector is going to mop up the job losses being experienced in the public sector is merely wishful thinking."

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Increasing volume of legislation costs businesses £2bn

23 March 2011 Last updated at 06:33 GMT

By Eddie O'Gorman BBC NI business reporter

Businesses have lost out on more than £2bn in the last decade due to an increasing volume of legislation, according to business lobby group the CBI.

Nigel Smyth's comments come ahead of the Chancellor, George Osborne's first annual Budget statement on Wednesday.

Mr Smyth said additional support for growth and job creation, and less red tape, particularly relating to employment were the main preoccupations for Northern Ireland business.

Nigel Smyth of the CBI says businesses are having to deal with an increase in legislation

He said that business organisations had been lobbying hard to encourage government to reduce barriers to high-growth companies in order to create employment.

"This includes doing something to relieve the regulatory burden," he said.

"But they are also having to cope with increasing costs such as the carbon reduction commitment, which from being an incentive, has now turned into a carbon tax."

Mr Smyth said that Northern Ireland companies were competing in global markets now, and many of their competitors were not having to deal with the same level of regulation.

As a result they had a lower cost base than companies based in the UK, he said

He said: "The danger is that some of these highly successful, highly productive companies will simply move to locations where the cost base is not so high."

Dr Esmond Birnie, the chief economist for PricewaterhouseCoopers in Northern Ireland, believes that any tax increases in the Budget would have a serious effect on the local economy.

"February's unemployment is up 6.3% year-on-year," Dr Birnie said.

"That is the highest increase of all 12 UK regions, and we are forecasting that local economic growth will not exceed one per cent in 2011.

"It means that further tax increases could have a disproportionate impact on economic growth and business confidence."

On the bright side, it is thought that the 1p rise in fuel duty due on 1st April might be postponed because of the recent steep increase in oil prices, while personal tax allowances are set to go up by £1,000 to £7,475 for 2011/12.

It is estimated that this should reduce the tax liability of 23 million taxpayers by an average of £200 a year.
The Chancellor has already promised to increase personal allowances to £10,000 by 2015.

An announcement is also expected on the subject of corporation tax, or company profits.

Many economists and Northern Ireland business people have been arguing strongly that a reduction from the current rate of 28% closer to the rate of 12.5% which exists in the Republic, would do much to encourage inward investment.

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[Oil and Gas Post] - Fuel duty may be frozen, hints George Osborne

Fuel duty may be frozen, hints George Osborne

 20 March 2011 Last updated at 15:29 GMT

The government may scrap the rise in fuel duty planned for next month, it has hinted.

Chancellor George Osborne told the BBC's The Andrew Marr Show that he was "looking very carefully" at freezing the duty in Wednesday's Budget.

He said he understood the pressure motorists were under from record-high petrol prices.

Mr Osborne also said the Budget would contain measures to help tackle record-high youth unemployment.

'Nonsense'

A freeze on fuel duty has been widely anticipated.

The price of petrol has risen sharply in recent weeks to more than £1.30 a litre on average.

The is largely due to increases in the price of oil due to concerns about supply because of unrest in the Middle East and Libya.

Most observers say they expect the price of both petrol and diesel to continue rising, and motoring organisations such as the RAC have called on the government to scrap the planned rise in duty due to take effect in April.

It is due to go up by inflation plus 1p, making a total rise of about 4p per litre.

Others said Mr Osborne should look beyond the cost of fuel.

"The chancellor should tackle the impact of rising fuel prices by focusing on the root of the problem - the UK's economic addiction to oil," said Simon Bullock at Friends of the Earth.

"Urgent measures are needed to make public transport cheaper and more convenient, encourage greener motoring and reduce our dependency on car travel."

Youth unemployment

Shadow chancellor Ed Balls, also speaking on The Andrew Marr Show, reiterated his call for the government to reverse the VAT increase on petrol.

He said it was "nonsense" to argue that the European Union would not permit such a reverse.

The government increased the VAT rate in January from 17.5% to 20%.

Mr Osborne also said he would make available additional help for teenagers to gain access to apprenticeships and "high quality vocational education".

The unemployment rate for 18-24 year olds is currently at a record high of 18.3%.

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http://www.bbc.co.uk/