Chamber Minute

April 2019

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

Welcome to this month’s Pennsylvania Chamber Minute.

Pennsylvania’s revenue collections are above estimate and the state is poised to end the fiscal year in June without the need for any new taxes.  Despite this fact, Governor Wolf and some lawmakers continue to target one of the Commonwealth’s most prolific industries – natural gas – for higher taxes.  This year, proponents want to dedicate money from a new severance tax on natural gas companies toward a program called “Restore PA,” which would be funded at the outset by a $4.5 billion bond and paid back over generations through severance tax revenue.

While the program is dedicated to help fund various community projects statewide – think stormwater improvements, infrastructure development and brownfield clean-up – many of these projects are already being funded by an impact tax that Pennsylvania put in place in 2012.  When including revenues from 2018, the state is on track to collect $1.7 billion from the impact tax, which is being distributed across all 67 counties and ensuring that critical projects reach completion.

For the fifth year in a row, we’re leading a coalition in opposition to the severance tax.  As I stated on a recent media conference call with other coalition leaders, there are several reasons why we stand opposed.  First, the current system of taxation is working and, according to the Forge the Future report, Pennsylvania could gain 100,000 new jobs and $60 billion in GDP if we allow the industry to operate at its full potential.  Second, natural gas companies in Pennsylvania already pay among the highest Corporate Net Income Taxes in the nation, and tacking on another industry-specific tax could make the decision easy for them to take their operations – and jobs – to another state in the shale play.  Lastly, despite the governor’s previous claim that what’s under the ground “belongs to all of us,” gas resources actually belong to property owners and it isn’t the government’s right to tax them just because they feel they can or should.

The Pennsylvania Chamber will continue to drive these points home to lawmakers and the Wolf administration as budget negotiations progress, in our advocacy for smart public policies that will attract jobs, revenue and key public projects to the Commonwealth.

Here are the key takeaways from this month’s message:

  • Restore PA would create generational debt for Pennsylvania taxpayers;
  • The current impact tax is already funding critical community projects throughout the state; and
  • Another severance tax would make Pennsylvania one of the most expensive states for natural gas companies to operate, and potentially drive them out of the Commonwealth.

Thanks for spending a minute of your time with the Pennsylvania Chamber, the Statewide Voice of Business.