Pennsylvania

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A Closer Look At The Initial Ethane Cracker Tax Break

As legislators prepare to vote on Governor Corbett’s $1.65 billion ethane cracker tax credit, PublicSource takes a closer look at the tax break that has already been signed into law: a “Keystone Opportunity Zone” expansion giving Shell a 15-year exemption from state and local taxes:

Earlier this year, the Pennsylvania Senate introduced a bill to increase the size of all the state’s Keystone Opportunity Zones. Senate Bill 1237 makes Potter Township’s tax-free zone large enough to accommodate Shell’s plant — if it’s not challenged.

But the township never asked for an expansion of its KOZ.

“If the KOZ is to go in there, the locals have to approve the zone’s creation,” said Philip Durgin, executive director of the Pennsylvania Legislative Budget and Finance Committee.

The township wasn’t consulted by the state, but it was visited by Shell officials.

“The only contact we had was Shell sending a consultant to talk to municipalities in the area,” Matsco said.

The plant promises to bring in some local tax revenue. Potter collects a local services tax of $52 a year from all who live or work in the township, including those Shell will eventually employ.

That’s $20,800 each year from the 400 Shell workers the company is required to hire under the KOZ. The township also depends on a wage tax of .5 percent, collected from employed residents.

Earlier this month, StateImpact Pennsylvania talked to people in neighboring Monaca about the tax break and the cracker. We found people optimistic about the plant, but skeptical it would create the thousands of jobs the Corbett Administration is promising.

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