Industry Reaction To Wolf’s Severance Tax Proposal

Marcellus Shale Coalition president David Spigelmyer issued the following statement on Gov. Wolf’s new energy tax proposal unveiled Wednesday in Thorndale, Pennsylvania:

“Gov. Wolf fails to acknowledge that the natural gas industry already pays significant taxes in Pennsylvania. Natural gas operators pay the same taxes that every other business in Pennsylvania pays, which has helped generate more than $2.1 billion through 2013.  

“Pennsylvania is the only state that imposes a special impact tax that will have generated nearly $830 million by April of this year, directly benefitting all 67 counties throughout the Commonwealth.  Pennsylvanians have realized more than $700 million in royalties from energy-development on public lands.

“By any measure, these are significant revenues that are boosting local communities, as well as important environmental programs.  More importantly, revenue estimates fail to account for the more than 200,000 hard-working Pennsylvanians who are employed by or support this industry and generate substantial revenue for the Commonwealth by paying their taxes.  

“While we look forward to evaluating the policy details outlined by the Governor today, it’s clear that new energy taxes will discourage capital investment into the commonwealth and make Pennsylvania less competitive. Make no mistake, adding a five percent tax to any business sector – including the energy industry – is going to reduce capital spending and hit the supply chain, especially Pennsylvania-based small and mid-sized businesses, as well as our region’s labor and building trades.

“Pennsylvanians are looking to their elected officials to help create new jobs, not new taxes, especially during these difficult and challenging times within an industry that has reduced energy costs for every consumer and been a bright spot for the Commonwealth’s economy.”

Associated Petroleum Industries of PA

The governor's proposal for a new severance tax on natural gas development in Pennsylvania will harm job growth and weaken the state's economy, said Stephanie Catarino Wissman, executive director of Associated Petroleum Industries of Pennsylvania.

"The governor's proposed tax hike could threaten the future of our state's best job creators," said Wissman. "The current local impact tax, which is collected from every shale drilling site in the state, has distributed more than $630 million to communities since 2012 -- including more than $224 million in just 2014. That's on top of over $2.1 billion in state and local taxes generated by the energy industry. Driving development away from Pennsylvania will ultimately cost jobs and lead to less revenue for education, transportation, healthcare, and other state programs. The governor needs to look for better budget solutions that will keep the Commonwealth competitive, protect long-term economic growth, and preserve the engine of Pennsylvania job creation."