Energy & Infrastructure - February 13, 2015

 Wolf Expands Medicaid

Governor Tom Wolf announced the expansion of Medicaid to many uninsured Pennsylvanians.  Using the Affordable Care Act enacted by the federal government in 2010, Pennsylvania will now receive full federal funding for the next two years.  In subsequent years, Pennsylvania will be required to pay increasing amounts until 2020, when the Commonwealth will annually cover 10 percent of Medicaid costs.

Wolf’s Medicaid expansion rescinds the former “Healthy PA” program implemented under Governor Tom Corbett.  “Healthy PA” allowed Pennsylvanians to choose from three private coverage options, but awaited approval by the federal government.  As of this writing 156,000 Pennsylvanians have enrolled in “Healthy PA,” and will not see their coverage change in the immediate future.  According to the Pennsylvania Department of Human Services, the state hopes to transition current “Healthy PA” enrollees by fall 2015.  Under the new Medicaid expansion, up to 600,000 uninsured Pennsylvanians could be covered by Mediciad.  

Wolf campaigned on eliminating “Healthy PA” in favor of accepting the Affordable Care Act.

Wolf, DiGirolamo and Others Propose Differing Marcellus Shale Drilling Tax

Governor Tom Wolf proposed a 5 percent tax on the value of natural gas extracted in Pennsylvania along with an impact fee increase.  Currently, the revenue generated from the impact fee is distributed to municipalities most affected by natural gas drilling for the purpose of creating public works projects.  Created by Act 13 of 2012, the impact fee expires after 15 years of a well’s operation.  Under Wolf’s plan, the new extraction tax revenue would provide additional funding for public schools.  Meanwhile, the impact fee would be extended indefinitely and provide a sustainable source of revenue, as natural gas drilling in Marcellus Shale and Utica Shale could last into the next century.

Similarly, Representatives Gene DiGirolamo (R-Bucks), Harry Readshaw (D-Allegheny), Tom Murt (R-Montgomery) and Pam DeLissio (D-Philadelphia) unveiled a 3.2 percent tax proposal that would be collected in addition to the current impact fee assessed on individual wells.  With the newly generated revenue under the Representatives’ plan, programs would be funded throughout the Commonwealth, including education (40%), pension systems (35%), human service benefits (15%), and environmental projects (10%). 

Pennsylvania is the second largest natural gas producing state in the country, yet one of the few states that does not tax natural gas extraction.  The neighboring states of West Virginia, Maryland and New York all have comparable taxes to these proposals.