The LuLac Edition #2939, June 12th, 2015

THE PENNSYLVANIA BUDGET AND POLICY CENTER REPORTS ON SUPPORT FOR A SEVERANCE TAX

41 Groups Send Pa. Legislators Letter Urging Them to Enact Severance Tax

Revenue Would Fund Education, Econ. Dev., Clean Energy & Drilling Oversight

A diverse array of 41 major organizations, which serve or represent millions of Pennsylvanians, today called on state lawmakers to enact a fair and reasonable tax on the extraction of natural gas and use the revenue to reinvest in Pennsylvania’s public schools, promote economic development and clean energy, and strengthen oversight of the natural gas industry.
The groups – including education, environmental, women’s, religious, retirees, public interest, community development, human service, labor, anti-poverty and other organizations – urged the Pennsylvania Legislature in a letter to pass Gov. Wolf’s severance tax plan.
The letter notes that “the gas industry is not overburdened with taxes in Pennsylvania. Most drilling companies operate here as partnerships and pay only about a 3 percent tax rate on their profits. Drilling companies as a group paid less in Pennsylvania corporate net income taxes in 2014 than in 2008, even as production boomed. In many cases, companies pay no tax on net profits, due to federal energy incentives. And since most of Pennsylvania’s gas is exported to other states, 80 percent of the revenue from a severance tax would come from out of state.”
Pennsylvania is the only major gas-producing state that doesn’t have a severance tax. “We appreciate the jobs that natural gas drilling has brought, but responsible employers should pay their fair share. Since every other energy-producing state has seen fit to enact a severance tax it seems only right that Pennsylvania should enact one as well,” said Chad Trainer, legislative director for Pennsylvania AFL-CIO, which signed the letter.
“The people of Pennsylvania want to see increased investment in the education of their children, and they expect drillers to join them in paying their fair share,” added Jeff Garis, outreach and engagement director for the Pennsylvania Budget and Policy Center, another signer of the letter.
“A severance tax on natural gas will improve our schools, our communities and our lives. Why shouldn’t Pennsylvanians get the benefits citizens in almost every other state receive,” asked Lance Haver, director of civic engagement for the Philadelphia City Council. Council President Darrell L. Clarke also signed the letter.