2018-05-26 / Viewpoints


Time For State Gas Tax

Dear editor:

Gov. Tom Wolf has been proposing a shale gas “sev­erance tax” since his 2014 campaign days.

Why is this so hard to get passed when our state is desperate for money?

The Marcellus Shale Co­alition (an industry-funded group) stated that Pennsyl­vania producers pay plenty in the form of an impact fee.

Is this true? Not exactly.

MSC is using incomplete and cherry-picked data to make its case. They give an incorrect impression that Pennsylvania’s revenues per amount of natural gas extracted with the impact fee are similar to, or greater than, states with a severance tax.

Not even close.

When you look at gas- producing states, it’s very clear that Pennsylvania’s impact fee delivers way less revenue (per volume of gas produced) than severance taxes do.

Wyoming, for example, charges a total fee of about $100 per million metric cubic feet extracted. Loui­siana’s in the $95 range and even Texas is about $80.

So how does Pennsylvania do? Worse than every state except Ohio. Pennsylvania gets about $32.

The impact fee in Penn­sylvania is not a set number, but a 15-year diminishing scale that is based on pro­duction and an average price of natural gas.

So why are politicians and industry groups lying to you? They want you to get paid less, so they can get paid more. It’s about the money. It’s always the money.

When Pennsylvania’s state politicians talk about reducing your taxes, ask them why they don’t add a severance tax and give us a break.

James Sandoe

Gas Tax A Bad Idea

Dear editor:

Pennsylvania is already at a competitive disadvantage with its highest effective corporate tax rate in the country of 9.99 percent. Imposing a severance tax on shale gas, as Gov. Wolf has proposed, would position Pennsylvania to have one of the highest energy taxes in the country on producers.

Instead, a committed, pro- growth energy policy rooted in a skilled work force and leveraging our energy assets could create more jobs and greater revenue for Pennsyl­vania.

If we enacted bold reforms to create a more conducive environment for job creation and decreased the unemployment rate by a mere one-half percent, the state would realize almost an additional half-billion per year in personal income tax collections alone – not to mention untold millions more in sales taxes as con­sumer spending increased, and millions saved in en­titlement spending.

So we agree with Gov. Wolf that the state is missing out on hundreds of millions a year in revenue – but it’s not for a lack of a severance tax.

Kevin Sunday
Pa. Chamber of Businessand Industry

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