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Gas severance tax will protect our resources; Nikole Baker; Beaver County Times; June 18, 2015.
Below is a detailed critique of the subject letter.
“Pennsylvania is the only drilling state without a severance tax, yet it is one of the richest sources of shale gas in the world. As it is now, this highly profitable industry is profiting from our state’s resources without actually investing in it.”
[RWC] According to the Tax Foundation, PA’s business tax climate already ranks 34th for 2015, three positions worse than 2014 and 13 positions worse than 2012.
“A practical severance tax will finally force drillers to pay its fair share to our state, an equitable proposition for the people of Pennsylvania to which the industry is staunchly opposed. It will offset the health risks of gas drilling while raising revenue to implement low-carbon alternatives. It will also provide us with a necessary start towards safer drilling and cleaner energy.”
[RWC] Ms. Baker failed to mention PA has an impact fee in lieu of a severance tax. According to the Post-Gazette, “Pennsylvania communities to share $223 million in drilling impact fees” from 2014.
You may recall even the BCT finally conceded taxing Marcellus gas is “a tax that is paid by consumers” and acknowledged “Raising taxes could slow the economy.” No mention of that here, though.
In case you missed it, Ms. Baker wants us to force natural gas drillers/producers to subsidize (“invest”) their competitors (“low-carbon alternatives”). Check that; since the severance tax is “a tax paid by consumers,” Ms. Baker wants consumers (you and me) to subsidize “low-carbon alternatives”
“A just severance tax will protect Pennsylvania’s natural resources — our land, air and water. It will introduce more clean energy and energy efficiency programs, which will cut down on our state’s pollution. In turn, these programs will result in a healthier future for our citizens now, as well as future generations.”
[RWC] While I’m not unalterably opposed to impact fees and/or severance taxes within limits, they don’t represent “found” or “free” money. For example, why should fees/taxes on Marcellus gas go for anything other than covering regulatory costs and local infrastructure issues specifically related to drilling? Anything else creates a slush fund for politicians to spend as is/was the case for Medicare and Socialist Security taxes.
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