Editor & Publisher, Marcellus Drilling News (MDN)
[Editor’s Note: Four House Democrats from Western Pennsylvania are stating their opposition to Tom Wolf’s seventh attempt to impose a severance tax!]
As we reported two weeks ago, Pennsylvania Gov. Tom Wolf (Democrat) has, for the seventh year in a row, introduced a Marcellus-killing severance tax proposal as part of his annual budget proposal. Just like the six previous years, not only do Republicans think Wolf’s severance tax is a poor idea, so too do some in his own party.
Wolf’s budget with its severance tax provision is DOA according to State Rep. Josh Kail (Republican from Beaver County). But don’t just take Josh’s word for it. Last month four House Democrats—Reps. Pam Snyder of Fayette County, Rob Matzie of Beaver County, Chris Sainato of Lawrence County, and Frank Burns of Cambria County—wrote a letter to Wolf telling him a severance tax is “misguided” and a “nonstarter.” Strong language from those in his own party. Here’s the story from the Beaver County Times (emphasis added):
Gov. Tom Wolf has again proposed a severance tax on natural gas in Pennsylvania and, just like in years past, its prospects in the state Legislature appear bleak.
“I would be surprised if it got serious consideration in the House of Representatives,” said state Rep. Josh Kail, R-Beaver County. “In my estimation, it’s dead-on-arrival.”
Kail, whose district includes gas drilling areas in Washington County, was one of 20 Republican legislators from gas-rich southwestern Pennsylvania who told Wolf in a recent letter that his “tired” and “job-killing” severance tax would not only hurt a struggling industry, but also hinder COVID-19 vaccination efforts.
“We share your commitment to protecting the health of all Pennsylvanians amid the COVID-19 pandemic,” the state representatives said in a letter.
“However, at a time when we should be prioritizing vaccine distribution and discussing how to bring critical PPE and pharmaceutical manufacturing back to the U.S. and specifically to Pennsylvania,” they said, “you continue to push your same tired severance tax proposal that Pennsylvanians have rejected every year that you’ve been in office.”
Kail explained that natural gas is the feedstock to create polyethylene products, such as what will occur at Shell Chemicals’ $6 billion plant in Kail’s area of Beaver County, which are then used to make plastics, such as COVID-19 personal protective equipment and other medical equipment.
Impact on PA region raised as concern
Wolf wants to use severance tax revenue to help fund his four-year, $4.5 billion Restore PA initiative, a sweeping infrastructure proposal, and a $300 million Back to Work PA plan to spur job growth in an economy wracked by the pandemic.
But opposition to a severance tax is bipartisan in southwestern Pennsylvania, where a once booming industry has taken a nosedive amid a market glut and falling natural gas prices.
The gas industry, though, still provides optimism in many areas that have been desperate for good-paying manufacturing and industrial jobs since the collapse of steel in the 1980s…
In a statement last week criticizing Wolf’s proposal, the American Petroleum Institute’s Pennsylvania chapter cited a 2019 consultant’s study that identified 500,000 direct and indirect jobs in the state’s oil and gas industry with an average salary of about $120,000.
Those lofty figures are why Wolf’s severance tax requests fall on deaf ears among Republicans and Democrats alike in southwestern Pennsylvania, where economic development has been a perpetual issue for 40 years.
Opposition to severance tax from PA lawmakers
Late last month, four House Democrats from southwestern Pennsylvania, a rarity nowadays, joined in a statement calling a severance tax “misguided” and a “nonstarter” in the Legislature, and they made a similar argument as their Republican colleagues about the natural gas industry’s role in fighting the pandemic.
“This industry was deemed an essential industry by Governor Wolf last year, has produced the materials to manufacture the PPE that allowed us to respond to the pandemic, and is now producing the byproducts that are fueling the manufacturing, storage and distribution of the vaccine to Pennsylvanians,” read the statement from Democratic state Reps. Pam Snyder of Fayette County, Rob Matzie of Beaver County; Chris Sainato of Lawrence County and Frank Burns of Cambria County.
Wolf has frequently argued that Pennsylvania is the only major gas-producing state without a severance tax.
“Other major gas producing states like Texas, Oklahoma, Louisiana, and Alaska are collecting billions from the oil and gas industries to help fix roads, build schools and keep taxes low,” according to his budget plan released Feb. 2.
Kail said Wolf’s argument is a “red herring” because the state already has an impact fee charged to gas companies for drilling.
Opposition to a severance tax is not just limited to the House.
Comments from state Sen. Camera Bartolotta, R-Washington County, reflected the strong anti-tax stance among southwestern Pennsylvania legislators in the upper chamber, too.
“Governor Wolf continues to push for a job-crushing tax on natural gas that will hike utility bills statewide and chase away new investments in our community,” she said.
“This approach has not worked the first six times Governor Wolf tried it,” Bartolotta said, “and it is an even worse idea now when so many Pennsylvanians are out of work and families are struggling to pay bills due to his administration’s unilateral, arbitrary restrictions on employers.”
Editor’s Note: Tom Wolf is now a lame duck Governor. He cannot run again in 2022 and it is likely Republicans will increase their majorities in the Pennsylvania House and Senate. Democrats, therefore, feel free to say what they’ve been quietly acknowledging for years: Tom Wolf is a nose-in-the-air condescending trust-funder who is more interested in his reputation with the illuminati than the welfare of ordinary Pennsylvanians. Only a spoiled child would run his failed severance tax proposal up the flagpole a seventh time. But, that’s who Tom Wolf is and Democrats are saying so. Good for them. Let’s see more Democrats do the same.