Saturday, March 28, 2020

Gov. Wolf Vetoes Bill Giving Taxpayer Funded Subsidies To Manufacturers Who Use Natural Gas; Veto Override Attempt Coming

On March 27, Gov. Tom Wolf did as he promised to do-- vetoed House Bill 1100 (Kaufer-R-Luzerne) which would give an unlimited taxpayer-funded subsidy to certain manufacturers for using natural gas through a new tax credit program.
The tax credit of up to $22 million a year would go to each company investing at least $450 million in a new facility which creates at least 800 jobs to turn natural gas into fertilizer, methanol or other products.
The bill emulates the taxpayer-funded subsidies given to the Shell ethane plant in Beaver County which will provide an estimated 600 permanent jobs when completed.  Legislation passed in 2011 provided Shell up to an estimated $66 million a year in tax credits for building the plant in Pennsylvania.
Shell found the site and optioned the land for the ethane plant in March 2012 and site development and construction, which began in earnest in November 2017, is continuing today.  On March 18 Shell shut down construction of the site due to coronavirus concerns .
Gov. Wolf told StateImpact, Pennsylvania needs “to promote job creation and to enact financial stimulus packages for the benefit of Pennsylvanians who are hurting as they struggle with the substantial economic fallout of COVID-19.” 
Adding, the investment dollars and numbers of jobs required by the measure are not high enough to warrant the tax breaks. And given the economic impact of the new coronavirus pandemic, Wolf said more analysis is needed to enact any economic incentives right now.
He also cited what he says are flaws in the bill and indicated it is not a “responsible use of the Commonwealth’s limited resources.”
Trade unions, the natural gas industry, Republicans and some Democrats in the General Assembly supported the legislation.  Read more here.
Sen. John Yudichak (I-Luzerne) told Pennsylvania Capital-Star “We will rally as a Commonwealth and beat back the coronavirus pandemic, and when we do it will be time to get Pennsylvanians back to work by overriding Governor Wolf’s veto.”
Environmental groups opposed the subsidy for the fossil fuel industry.
“We applaud Gov. Wolf for his bold leadership in vetoing this dangerous bill,” said Jacquelyn Bonomo, President and CEO of PennFuture. “A bill that provides open-ended taxpayer subsidies to the fracked gas and petrochemical industries is not in the best interest of Pennsylvanians. We stand in solidarity with those who cherish clean air, clean water and healthy jobs and demand that the Legislature not attempt to override the governor’s veto of House Bill 1100.
"In addition, PennFuture stands ready to work with our elected officials and labor unions on a sustainable economic development policy that doesn’t incentivize pollution and moves our state away from the boom-and-bust industries that have devastated our towns and cities for the last century.”
Action Alert
The Chesapeake Bay Foundation is asking the public to contact legislators to make sure the Senate and House do not override the Governor’s veto of House Bill 1100.
[Note: While some have attempted to argue the tax credit doesn’t amount to a “taxpayer-funded” subsidy for business, what else can you call it when tax money due is not paid and other taxpayers have to fill the hole?]
Related Articles:
[Posted: March 28, 2020]  PA Environment Digest

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