April 5, 2019
Ellwood City Ledger
A number of business and trade industry associations on Thursday voiced opposition to Gov. Tom Wolf’s Restore Pennsylvania initiative, which would be funded by a severance tax on natural gas extraction.
The groups, including the Pennsylvania Chamber of Business and Industry, the Pennsylvania Manufacturers Association and the Associated Petroleum Industries of Pennsylvania, railed against Wolf’s $4.5 billion initiative, which seeks to pump money into infrastructure, technology and other development projects over the next four years.
The groups argued that Wolf intends to fund the program by placing a severance tax on natural gas extraction across Pennsylvania. That funding mechanism is unacceptable, according to Gene Barr, president of the Chamber of Business and Industry.
The natural gas industry in Pennsylvania already pays an annual impact fee that has generated $1.5 billion through the end of 2017, Barr said. The impact fee is essentially a tax, Barr said, and placing another tax on the industry would have far-reaching consequences.
“Those who are desperate for dollars simply want to see how many different ways we can tax the industry,” he said.
It’s a “myth,” Barr added, that Pennsylvania is the only state in the country that doesn’t tax the natural gas industry. Also false, he said, is that Wolf needs to rely on the natural gas industry to pay for his expensive Restore Pennsylvania plan.
Barr noted that Wolf has proposed the severance tax five times in the last five years, and it’s failed each time. He said funding Restore Pennsylvania seems like “subterfuge simply to get a severance tax more than anything else.”
For David Taylor, president of the Pennsylvania Manufacturers Association, “the name of the game is competitiveness,” and Pennsylvania already has an impact fee, a high corporate net income tax and a slow permitting process that can stifle growth within the natural gas industry.
It is “very frustrating (that) at every turn, we hear out of Harrisburg more ways we can hobble” the industry, Taylor said.
“Pennsylvania is already a very expensive place to do business, and if we want investment, growth and economic dynamism, we have to act like we want it,” he said.
The executive director of the Associated Petroleum Industries said Wolf’s “continued targeting” of the state’s natural gas industry is “counterproductive” and “punitive.”
“This initiative doesn’t restore Pennsylvania,” said Stephanie Catarino Wissman. “It jeopardizes Pennsylvania’s standing in the world economy.”
State officials came to Aliquippa in late February to discuss blight and redevelopment issues there, but also to garner support for Restore Pennsylvania. At the time, a regional director for Wolf said enacting a severance tax is the only way Restore Pennsylvania will come to fruition.
At that same meeting, state Department of Community and Economic Development Secretary Dennis Davin called the severance tax “common sense” and “reasonable” and said it would be enacted in March 2020 if it passed in the General Assembly.
Just last week, Wolf came to Hopewell Township to talk about the need for flood-mitigation projects that could be funded by Restore Pennsylvania. At that time, he said 80 percent of the severance tax would be funded by residents or businesses in other states or in Canada who purchase the natural gas extracted from Pennsylvania.
The governor also said that other states have a severance tax on the books and that the natural gas industry is alive and well in those places.