A natural gas tax will work

The lack of a severance tax is selling Pennsylvanians short, says state official

• SUNDAY, MAY 20, 2018

PSection

Dennsylvania is fortunate to have one of the world’s most prolific sources of natural gas right under our feet in the Marcellus and Utica shales. Gov. Tom Wolf has strategically positioned the commonwealth to take advantage of these resources, including his proposal for a commonsense severance tax on extracted gas. Though some groups are fighting hard to spread false claims that a severance tax will kill jobs and overtax the gas industry, that is simply not the case.

Mr. Wolf’s track record in the private sector shows that he understands business. And, he also understands when companies aren’t paying their fair share to extract the abundant natural gas here in Pennsylvania. The commonwealth is the only gas-producing state that does not have a severance tax. As a result, companies are taking advantage of our resources by drilling for gas and then shipping it off to other states, without building value and jobs in Pennsylvania.

Not only is that unfair to Pennsylvania, but the lack of a severance tax hinders our ability to budget effectively. The proposed tax would generate an estimated $248.7 million in the next fiscal year alone, enabling us to address key budget needs facing the state.

And severance taxes have been a boon for other states. Wyoming has been debating how to use the $1.7 billion in its severance taxfunded rainy-day fund. Alaska has built up a Permanent Fund with more than $64 billion generated from oil and gas taxes. If Governor Wolf’s proposed severance tax had been in place since 2011 when the impact fee was first implemented, it would have generated $1.2 billion in revenue — on top of the $1.5 billion generated for local communities through the SEE GAS, PAGE D-4