Pennsylvania

Energy. Environment. Economy.

As budget negotiations heat up, so does rhetoric over gas tax

“I think the Governor’s severance tax proposals are designed to stop the growth of natural gas," says House Speaker Mike Turzai (R- Allegheny). "It’s going to stop energy independence and it’s going to stop the growth of jobs in the commonwealth of Pennsylvania.”

Marie Cusick/ StateImpact Pennsylvania

“I think the Governor’s severance tax proposals are designed to stop the growth of natural gas," says House Speaker Mike Turzai (R- Allegheny). "It’s going to stop energy independence and it’s going to stop the growth of jobs.”

As the June 30th state budget deadline draws near, Republican legislative leaders are taking aim at the centerpiece of Governor Wolf’s spending plan—a new severance tax on natural gas drillers.

Senate Republican leaders issued a statement Tuesday saying they have “severe concerns” about the tax, but House Speaker Mike Turzai (R- Allegheny) called a press conference to put it more bluntly.

“The governor is basically calling for a de facto moratorium, akin to what New York has,” he told reporters. “It’s going to stop energy independence, and it’s going to stop the growth of jobs in the Commonwealth of Pennsylvania.”

Turzai called the governor’s plan to raise billion dollars for public education “fairytale revenue projections” that will hurt an industry already dealing with poor market conditions. Pennsylvania is the only major gas-producing state in the nation that does not tax production. Instead, gas companies pay an impact fee for each well. The bulk of that money is sent back to communities where the most drilling occurs.

Turzai says this system is working and touted the fact that impact fees brought in $223.5 million in 2014.

The fees are collected and distributed by the state Public Utility Commission (PUC), which posts the information on a special website every spring. After the press conference, Turzai’s spokesman Steve Miskin said the impact fee data had been released online Monday, but it was suspiciously removed. He speculated that Wolf’s office was deliberately meddling.

“I don’t have a clue why the governor’s office is getting involved in that,” said Miskin. “But I know some cynics might wonder.”

PUC spokesman Nils Hagen-Frederiksen says the numbers are still being finalized and have always been reviewed by the Office of the Budget, which is part of the executive branch under the governor.

“I’m not really sure how anybody may have gained access to that information,” he said. “We’ll look into it. There was no intent to publicize it, and then remove the information from the website.”

Wolf spokesman Jeff Sheridan called Miskin a “conspiracy theorist.”

“That’s the most ridiculous thing I’ve ever heard,” he said. “Speaker Turzai has repeatedly opposed a severance tax that is supported by the majority of Pennsylvanians and members of both parties.”

Sheridan says Wolf won’t accept a budget deal that perpetuates the status quo. It’s not yet clear whether the two sides will manage to reach a compromise. When Turzai was asked by a reporter whether he would accept any sort of gas severance tax, he would only say he opposes the governor’s plan.

According to a recent analysis by the state’s nonpartisan Independent Fiscal Office, Pennsylvania’s impact fee amounts to one of the lowest effective tax rates on shale gas in the country, but Wolf’s severance tax plan would shift it to be among the highest.

 

Comments

  • winterarrives

    “The governor is basically calling for a de facto moratorium…” If only that were true and we would finally, and hopefully not to late, be on our way to a clean and sustainable energy future. Energy from sources that don’t explode, leak, spill, pollute and have radioactive waste and carcinogenic VOC emissions.

  • Ann DeLucia

    When there are hundreds of families living in PA without potable water due to fracking related issues, sick children with rashes, headaches and asthma. Land, air and water contamination that in many cases is irreversible. There are not enough jobs or money to support more destruction of our state. If the governor was a smart man, he would STOP all gas extraction now. He needs to understand this industry will eventually cost us more than we could ever imagine and it will leave a devastating future for the people who will follow us. It is not being done safe, cannot be done safe and it needs to stop now before it’s too late.

  • kenneth weir

    I wonder if Turzai has profited from this industries deep pockets and the politicians thirst for more and more money?

  • Morning Call

    Latest EPA study says fracking is not a danger to drinking water.

    http://cfpub.epa.gov/ncea/hfstudy/recordisplay.cfm?deid=244651

    • Morning Call

      From the study:

      “We did not find evidence that these mechanisms have led to widespread, systemic impacts on drinking water resources in the United States. Of the potential mechanisms identified in this report, we found specific instances where one or more mechanisms led to impacts on drinking water resources, including contamination of drinking water wells. The number of identified cases, however, was small compared to the number of hydraulically fractured wells.”

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