April 17, 2017
An editorial about the governor’s proposed severance tax (“Markets will support new gas tax,” April 2) overlooked an important fact: Pennsylvania already taxes the natural gas industry.
In addition to corporate taxes the industry pays, it also pays an impact fee. Pennsylvania is the only natural gas state to impose an impact tax — the revenues from which have been distributed to every county and help to fund critical local projects.
Pennsylvania’s overall tax climate is more burdensome than other states with shale drilling. Pennsylvania’s corporate net income tax is the second-highest rate in the nation. To say that the state lets drillers off the hook because we haven’t placed yet another punitive tax on this industry compares apples to oranges. Other states in the shale play don’t have an impact tax and they don’t have our burdensome tax climate.
As the state’s unemployment rate continues to surpass the national average — with ongoing employment casualties in manufacturing, energy, construction and the skilled trades — elected officials need to be mindful of policies that would make it harder for job creators to operate. A thriving natural gas industry will greatly benefit Pennsylvania’s economy, adding direct and indirect jobs throughout the state. On the other hand, placing an additional tax on the natural gas industry will only jeopardize its future in Pennsylvania.
If we truly want the industry to flourish, we cannot look to it as a never-ending revenue source for increased state spending. Continued taxes on this industry aren’t a panacea to resolving the state’s budgetary woes; rather, it would unnecessarily discourage domestic energy production and economic growth at a time when our state needs both more than ever.
PENNSYLVANIA CHAMBER OF BUSINESS AND INDUSTRY