Chamber Minute

May 2018

Hi, I’m Gene Barr, president of the Pennsylvania Chamber.

Welcome to this month’s Pennsylvania Chamber Minute.

A few weeks ago, Governor Tom Wolf held a press conference calling on lawmakers to pass a misguided proposal he’s pushed for four straight years – another tax on the natural gas industry.

His plan includes a new four percent tax in addition to the existing impact tax that’s already generated more than $1.5 billion. The Governor and other severance tax supporters are saying they don’t believe the $1.5 billion is “real revenue.” The Governor has even admitted that this revenue isn’t necessary to balance the budget but he wants “extra money” to pay for things.  He also continues to falsely claim that the industry needs to be taxed because what’s under the ground belongs to Pennsylvania.  Let’s take a closer look at each of those statements.

First, severance supporters always say that Pennsylvania is the only state without a natural gas tax.  Not only is that not true – California is another state that doesn’t single out the industry for a tax – but Pennsylvania’s impact tax IS an industry tax – and more importantly, it’s a tax that has kept us competitive.  Under the governor’s plan, Pennsylvania would become one of the highest taxed among the drilling states, which threatens to drive the industry and the jobs it’s created away. 

As far as Governor Wolf’s claim that “extra money” would pay for things like infrastructure and education, consider the economic growth (and extra revenue) that would result if we allowed the industry to operate and grow without another punitive tax. A new economic study, Forge the Future, has found that Pennsylvania stands to grow GDP by $60 billion and create 100,000 new jobs, not to mention the billions of dollars in revenue that would result. 

Lastly, we can’t ignore Governor Wolf’s repeated assertion that what’s under the ground belongs to all of us.  This is a demonstrably false statement. Pennsylvania land owners have mineral rights to their own property – it is NOT the state’s for the taking.  If this statement really were true, the first place the Governor would be asking companies to drill are state-owned lands – but, he has put a stop to any new gas development in these areas.  This means that when he’s talking about land that belongs to “all of us” he specifically means private property. We think that’s wrong, and will continue to fight against this attack on taxpayers statewide.

Thanks for spending a minute of your time with the Pennsylvania Chamber, the statewide voice of business.