(The Center Square) – While there is wide-ranging consensus Pennsylvania needs improved broadband infrastructure – particularly in rural areas of the state – funding sources for the project could be debated as state lawmakers wrangle over budgets and policy decisions.
Broadband was an issue discussed frequently during a three-and-half-hour budget hearing March 22 between the state Senate Appropriations Committee and Dennis Davin, secretary of the Department of Community and Economic Development.
During the hearing, Davin said broadband expansion and upgrades could at least partially be funded through Gov. Tom Wolf’s proposed $3 billion Back to Work PA program, which would be funded through a severance tax on such resources as natural gas.
State Sen. Kristin Phillips-Hill, R-York, pressed Davin about his agency’s financial allocation of broadband at the recent hearing.
“I don’t see much reference to broadband in your agency’s priorities,” Phillips-Hill said. “A budget is a vision.”
Phillips-Hill had questioned Davin about DCED’s commitment to broadband expansion during the question-and-answer session and opined that it did not appear a high priority, based on the documents his department supplied.
“Please don’t put words in my mouth,” Davin said, in response. “It is hugely important. We need significant resources to make a bigger dent.”
State Sen. Cris Dush, R-Brookville, said he was hesitant to back another tax.
He pointed to other state-imposed taxes – hotel occupancy and gaming – that have fallen short of delivering originally anticipated revenues to the state’s ledger.
“There’s these huge projections, and miniscule returns on these taxes. That’s one of the reasons why many people are pushing back so steadfastly against the severance tax. It also opens up the gate to severance taxes on every other thing in the commonwealth that comes from the ground.”
Dush also asked Davin how much his department anticipates receiving for broadband expansion through the would-be severance tax and inquired why it was not reflected within the budget.
“We don’t know specifically how much it would be from the severance tax,” Davin said. “That would be based on discussions we would have with you, the legislature. We would love to have those discussions.”
At face value, without the severance tax in play, Davin said the agency currently is working with a $5 million budget for broadband improvements, based on prior allotments from the legislature.
State Sen. Patrick Browne, R-Lehigh, said President Joe Biden’s $1.9 trillion COVID-19 relief act could serve as an alternative to funding broadband needs.
Pennsylvania is slated to receive $7.3 billion in federal funds through the act in the next two years, and Browne said the narrow permissible uses could benefit the issue under the microscope.
“There’s three things that (federal officials) mentioned that we can use those receipts for … water, sewer, broadband,” said Browne, who serves as the committee’s majority chair. “It’s likely that we will have more dollars than we need to balance our books.”
Based on his own projections, Browne said he believes portions of the federal allocation of funds could serve as a viable substitute to the severance tax.
“We will have an opportunity to use a significant piece of this … for a significant, real investment in broadband in this commonwealth,” Browne said.
Of Wolfe’s severance tax proposal, in general, Browne said, “We’ve been down this road. There are many different opinions on what we should do with that. It has not gained enough support to advance. That’s the facts.”
