Organization opposes PA governor's natual gas severance tax

By Patrick C. Miller | February 12, 2018

The Marcellus Shale Coalition (MSC) opposes Pennsylvania Gov. Tom Wolf’s proposal to impose a state severance tax on natural gas production.

During his 2018-2019 budget address delivered from the state capital in Harrisburg, Wolf said, “Pennsylvania is blowing most other states out of the water when it comes to production. And by joining every other gas-producing state and passing a severance tax, we could also join them by bringing billions into our own coffers.”

In response to Wolf’s remarks, MSC president David Spigelmyer said, “Pennsylvanians expect our leaders in Harrisburg, including Governor Wolf, to focus on common-sense solutions that encourage and support job creation across the Commonwealth.

“Unfortunately, the governor once again is putting politics first by proposing additional energy taxes that will make hiring and investing in Pennsylvania more difficult for local job creators, small businesses and manufacturers,” he added.

Wolf said that states such as Texas, Oklahoma, Louisiana and Alaska are bringing in billions of dollars from the oil and gas industries to fix roads, build schools and keep taxes low. “Ask these oil and gas behemoths to pay their fair share for extracting Pennsylvania’s bountiful resources, and we can build a brighter future for Pennsylvania,” he said.

However, Spigelmyer said Pennsylvania’s oil and gas industry is already paying a significant amount in taxes. “Pennsylvania’s natural gas tax—a that’s paid in addition to any number of other state business taxes—has generated more than $1.5 billion in new revenue for communities and environmental programs across the entire commonwealth,” he explained.

According to MSC, Pennsylvania’s natural gas impact tax generates $200 million in annual revenue—a total of $1.5 billion since 2012. The organization said the impact tax is levied in addition to other taxes that all Pennsylvania businesses pay, including a corporate net income tax that’s the second highest in the nation.

Wolf said the severance tax on gas would be “paid by people mostly outside of Pennsylvania to use our natural resources.”  Because of this, he claimed Pennsylvanians are paying for Alaska’s schools and Texas’ roads. “I don’t know about you, but I don’t remember getting a thank you note from anyone in Alaska or Texas,” he added.

MSC said that if Wolf’s previous energy tax proposal was implemented, Pennsylvania’s effective tax rate would be nearly six times higher than Ohio’s and 80 percent higher than West Virginia’s.

“While we are encouraged by the administration’s recent efforts to address the permitting logjam, our leaders in Harrisburg must work together on competitive policies focused on growing energy and manufacturing jobs, now and for generations to come,” Spigelmyer said.