Pennsylvania shale drillers pay plenty, even without severance tax

In a recent op-ed, AFSCME Executive Director David Fillman claims Pennsylvania’s shale drillers are not paying their “fair share” due to the lack of a natural gas severance tax. Pennsylvania does levy a drilling tax, it just goes by a different name – an impact fee.

Drillers have paid more than $850 million from 2011 to 2014 in impact fee taxes, on top of the $318 million in other state taxes since 2009. Still believe the industry is getting off easy?

The Independent Fiscal Office testified that under Gov. Tom Wolf’s proposal, the effective tax rate would be 17.3 percent in the first year – the highest severance tax in the nation. Again, that’s on top of all other state taxes paid by drillers.

Most importantly, a severance tax harms middle class families already burdened with some of the nation’s highest taxes. Families earning less than $100,000 will pay an additional $180 million (mostly through higher energy bills).

Piling taxes on the oil and gas industry is no way to help the middle class. Instead, Filliman and other labor leaders should stop fighting pension reform and advocating for tax increases on working families..

JON REGINELLA, staff assistant, Commonwealth Foundation

Author: Joe ReginellaPublication: PennLive