Severance tax will cost Pennsylvania jobs, business officials say

Gov. Tom Wolf’s proposed severance tax could cost thousands of job and stunt the Pennsylvania economy, business officials said Tuesday.

The conference, held on the steps of the Capitol Rotunda, comes amid an increasingly tense budget battle. Immediately after the shale event, a group of advocates for education funding took to the rotunda.

PA Chamber of Business and Industry President Gene Barr said increased taxes could “jeopardize the success” of the state’s fastest-growing industry. Instead of more taxes, he said, greater investment is needed.

“We have great promise from what’s happened so far with the reserves we have from this tremendous resource, but we need more infrastructure to move the product to market,” he said.

Speaker of the House Mike Turzai, R-Allegheny County, also took to the podium to echo Barr’s sentiment.

“Why are being apologetic?” He said, noting that the industry has proven to be a boon to the state’s workers.

Wolf’s plan would call for a 5 percent severance tax on the value of gas at the wellhead, as well as charge of 4.7 cents per thousand cubic feet of volume. The administration expected it to raise about $1 billion per year, the majority of which would go toward education funding.

The new tax, which would take the place of the existing impact fee, could take Pennsylvania from last place to first among similar states, according to a Independent Fiscal Office report issued this month.

On Tuesday, opponents to the tax cited the state Department of Labor & Industry’s 2014 calculation that shale development resulted in 243,000 new jobs, ranging from the well sites to road construction and other related industries.

The department quietly revised those calculations last month, however.

According to its most recent calculations, the industry accounts for nearly 60,000 new jobs since the start of the natural gas boom in 2007 and about 89,000 jobs in total.

Regardless of the specific number, however, the industry has become a major economic engine for the state.

“Natural gas development has brought good jobs with good wages for our members,” said David Horn, of the Laborers-Employers Cooperation and Education Trust. “We want to see this industry continue to grow in order to create more jobs, including for workers currently in our training programs.”

Author: Wallace McKelveyPublication: PennLive