PIOGA on severance tax proposal: Another attempt to punish an economic driver in Pennsylvania

Posted: February 6, 2018 1:45 pm



Pennsylvania Independent Oil & Gas Association President & Executive Director Daniel J. Weaver today issued the following statement regarding Gov. Tom Wolf’s budget proposal to establish a severance tax on natural gas production:

“Year after year, the legislature has rightfully rejected calls for an additional tax on natural gas production in the Commonwealth.  We encourage them to reject this proposal once again, and allow natural gas development and pipeline construction to continue to grow and provide economic opportunities, jobs and energy savings for Pennsylvanians.

“Nothing has changed in the state’s cumulative tax structure and Impact Fee program to make an additional severance tax anything more than a plan to stifle the growth of an increasingly important segment of our state’s economy.  We still have the country’s highest corporate net income tax, and we continue to compete for investment against states with huge shale gas reserves and whose corporate and personal tax rates are far less than those in the Commonwealth, including Texas, which collects no corporate or personal income taxes.

“Pennsylvania already has a severance tax. It is called an Impact Fee, and it translated to an equivalent of a 2.9% percent additional tax in 2017 when our state’s steep natural gas price discounts are taken into account and, despite this, is still projected to bring in $46.1 million more than in 2016.  To propose another burden on our industry on the same day as an announcement by the state Department of Environmental Protection to increase well permitting fees by 250 percent is more evidence that the Wolf Administration is seeking to punish Pennsylvania’s energy producers and job creators.”

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