Matt Baker opposes governor’s proposed severance tax on drillers

State Rep. Matt Baker recently joined Speaker of the House Mike Turzai’s opposition to Gov. Tom Wolf’s proposed 5 percent severance tax on Marcellus Shale drillers in Pennsylvania.

Last week Turzai told Pennsylvania Business Daily that the measure was a “job killer.”

Baker, whose entire district is within the shale region, told Pennsylvania Business Daily that the region is critical to his district in terms of dollars, jobs and economic impact; and if Wolf’s proposal passes, it will increase unemployment in his district.

The proposed tax is part of Wolf’s newest budget. The budget deadline is June 30.

“The unemployment rate in our area was double digits before the natural gas industry arrived,” Baker said. “At one point we had single digit unemployment.”

The Marcellus Shale employs approximately 28,155 in the oil and gas industries and 203,814 in ancillary industries, statewide, Baker said.

The economic impact has been both substantial and transformative in providing family-sustaining jobs and increased commerce for most sectors of business, Baker said.

“In 2014 natural gas production in Bradford County produced $3.02 billion,” Baker said. “I do not support the severance tax as proposed by the governor. It is the antithesis of increasing a job and economic climate that is conducive to a competitive marketplace.”

He went on to explain the tax would impede continued capital investment, gas production and economic opportunity in his district, and potentially jeopardize millions of dollars in impact fees.

“I am very concerned that if new taxes are imposed it could have a significant economic impact not just to those dependent upon jobs but also will diminish and negatively impact landowners’ royalty income,” he said.

Baker added the lifetime royalty for drilling wells in Bradford and Tioga Counties is estimated at $7.6 billion.

“I would like to see Pennsylvania become a world leader in gas production and that could happen provided the appropriate construct of regulatory oversight and a tax structure that incentivizes economic opportunity all while also protecting the environment,” he said.

Baker said his district has hosted international visitors who are very interested in seeing how they can learn to be more energy independent.

“This is a national security issue for many countries especially those dependent on Russian gas, for which they are paying triple, or more than the price of gas than Americans now pay,” he said. “I believe with careful planning and a strategic long-term view of natural gas production that deploys greater take-away capacity with the deployment of additional gathering line and pipeline infrastructure Pennsylvania could very much compete on the world market.”

Publication: Keystone Business News