Don't raise taxes on natural-gas producers

The industry pays its fair share in Pennsylvania and creates enormous economic benefits

The May 20 Forum piece by Dennis Davin, the secretary of the Department of Community and Economic Development, in which he favors a new tax on natural-gas development in Pennsylvania is misguided.

It is deeply concerning that the chief economic development person for Gov. Tom Wolf would openly champion in a punitive tax on Pennsylvania job creators. With economic policies like this, is it any wonder that Pennsylvania continues to lag behind the rest of the country with the seventh-highest state unemployment rate?

Keep in mind, natural-gas producers already pay the same income taxes, sales taxes and payroll taxes that every other business in our commonwealth pays. In addition, they pay an impact “fee” that no other state assesses and no other industry has to pay. This fee alone has raised nearly $1.5 billion since it was enacted in 2012.

While Mr. Davin does acknowledge the impact fee (advocates usually simply lie and claim we don’t tax natural-gas drillers), he dismisses it as minimal. Yet, consider that, in 2017, Ohio raised $36.7 million and West Virginia raised $69 million from their respective severance taxes, while Pennsylvania’s levy raised $173.3 million. This illustrates a simple truth. It is not that our tax rate is too low, but that it will never be high enough to keep up with the insatiable appetite among many in Harrisburg to spend other people’s money.

Based on projections from the state’s Independent Fiscal Office, General Fund tax revenues are expected to come in almost 4 percent higher than last year. There is no need for additional tax revenue to balance the budget.

Instead of thinking of new ways to tax this industry, Mr. Wolf’s economic development chief should focus his time on growing the number of family-sustaining jobs that result from a thriving natural-gas industry and the downstream industries developing around it.

We’re seeing the benefits of natural gas as a feedstock realized at Shell’s Beaver County petrochemical facility, as well as at Sunoco Logistics’ Delaware County natural-gas-liquids processing facility. These two projects alone represent billions of dollars in capital investment, along with thousands of good-paying local jobs. Projects like these also create additional downstream manufacturing opportunities.

Lower natural-gas prices are also providing relief for middle-class families. On average, Pennsylvanians have seen a 38 percent decrease over the last decade.

The benefits of clean, low-cost natural gas, along with the investments being made in communities across this commonwealth, should be celebrated instead of met with new impediments. Mr. Gov. Wolf and his chief economic development officer should rethink their approach.

Rep. Mike Turzai, R-Bradford Woods, is speaker of the state House of Representatives.