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Time to Stop Losing the Revenue We Need: A Severance Tax is Still a Good Idea
By Diana Polson, Stephen Herzenberg, and Marc Stier Continue reading
Category: Severance Tax
Four Misconceptions About a Severance Tax
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Public Investment and Economic Growth: Even the Commonwealth Foundation Gets It (Sometimes)
A strange post a few days ago by Elizabeth Stelle of The Commonwealth Foundation seeks to undermine the case for a severance tax on natural gas drilling, but inadvertently explains exactly why we need new recurring revenues in the state. Stelle first repeats once again — without evidence — the same tired argument that natural gas drillers “pay more in taxes and regulatory costs than producers in competing states.” Not once has anyone at the Commonwealth Foundation quantified those regulatory costs or attempted to respond to a series of papers put out by PBPC, including this most recent one, that show that natural gas drillers are not paying much, if anything, in corporate income taxes to Pennsylvania and are paying far less in taxes (and fees) here than in other states. The second part of Stelle’s post then points out that there is a large backlog in Department of Envioornmental Protection… Continue reading
Are the Republicans Ready to Gut Higher Education to Avoid a Severance Tax on Natural Gas Drilling?
As we enter the third week of an impasse over funding the 2017-2018 Pennsylvania state budget, an astonishing possibility has come into view: the House Republicans, led by Speaker Mike and Turzai and Majority Leader Dave Reed, appear to be prepared to block funding for the four state-related universities – Penn State, University of Pittsburgh, Temple University and Lincoln University – rather than agree to the Governor’s demand that they raise $600 to $800 million in new recurring revenues. Governor Wolf and the Republican-led legislature have apparently agreed to a number of one-time revenue measures to close the budget deficit – proposals like borrowing from other funds or selling licenses for new gaming sites – that only bring in revenues in one year. But the Republicans, particularly in the House, appear unwilling to agree to Governor Wolf’s insistence that the fiscal health of the commonwealth requires new recurring tax revenues… Continue reading
A Severance Tax: The Basics
Pennsylvania has been considering a severance tax on natural gas for years. Here are four reasons it is long overdue: TALKING POINT #1: A severance tax can bring in substantial and, as natural gas prices rise, growing revenues to help close our budget and investment deficits now and in the future. Governor Wolf’s proposal is projected to bring in $349 million next year, $712 million in 2018-2019 and $1.15 billion a year by 2021-22. (These are net revenues after deducting a credit for the impact fee already paid by natural gas drillers.) Even a tax at slightly lower levels brings in over $200 million next year and close to a billion dollars a year 2021-2022. TALKING POINT #2: Oil and gas development companies pay comparatively little in state taxes now. Even though gas production has increased from 4,070 billion cubic feet in 2004 to 5,096 in 2016, total revenue from… Continue reading