Keep PA Competitive – Just Say No on the Severance Tax

Screen Shot 2015-10-13 at 4.58.06 AMRobert L. Heed, II
President of RHL, Susquehanna County, PA

 

The experience of this one small company illustrates the enormous economic good delivered by the Marcellus Shale industry and the enormous harm a severance tax would mean.

My business, RHL Companies, Inc., would not be what it is without the development of Marcellus Shale; neither would the local economy.  I feel that a severance tax would jeopardize what I have built today. I would like to commend the Pennsylvania representatives for voting down Governor Wolf’s latest version of a severance tax during the recent budget debate. The proposed tax was effectively twice that of any other state in the country and would have severely crippled the business environment in the Commonwealth.

severance tax

RHL Offices and Shop – Montrose, Pennsylvania

In 2004, I started RHL in Susquehanna County, with just one employee.  Today, 11 years later, my business has grown considerably and now offers everything from land clearing and hydroseeding, to erosion control and custom grinding.

I employ 35 hardworking people, all from our local area I might add. The average salary for each is $60,000 per year, plus a full benefit package, whereas the average salary in Pennsylvania is only somewhere around $45,000, I believe. In addition to compensating my employees well, I encourage them to develop new skills, with added training, and job experience.

severance tax

Making a wetland crossing while installing a gathering line.

My company directly affects the local economy too; this year alone we spent over $5 million on regional suppliers and vendors. And my financial success has allowed us the opportunity to donate $25,000 to local charities, schools, and youth, & sport programs, something I could only dream of doing in my early days.

The outlook for the remainder of 2015 and the future for my company is taking a down turn, as it is for many of the businesses servicing the natural gas industry. If the slow continues, I will need to regress into my original business of timber harvesting, firewood and local excavating. This change will most likely force a reduction in my workforce and restrict the revenue that we are able to pass on to equipment dealers, parts stores, etc.

severance tax

Widening a road.

All in all, I believe we need to create a brighter future for our youth, including my own children. I believe creating and keeping jobs in Pennsylvania with a variety of skill levels and opportunity is the key to accomplishing this. Should a severance tax pass and the lull in the natural gas industry continue I fear this brighter future for our youth will be found in another state!

Keep Pennsylvania competitive for the companies who will employ our future generations, just say no to a severance tax.

Editor’s Note: This article reposted from Well Said Cabot.

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One thought on “Keep PA Competitive – Just Say No on the Severance Tax

  1. Mr. Heed this is an excellent article that makes lot of sense. Something that Governor Wolf seems to lack. I came across this article too.

    “It’s true some West Virginia drillers have parked their rigs because of plunging oil and natural gas prices. And last week, Gov. Earl Ray Tomblin cited lower prices for natural gas sales — sales that are up 30 percent over last year — when explaining the unprecedented drops in the state’s severance tax collections and announcing an across-the-board budget cut of 4 percent for most West Virginia government agencies.”

    http://mydailyregister.com/news/2179/low-prices-dont-stop-investments-in-states-oil-natural-gas

    I find it odd that Governor Wolf wants to rely on a changing oil and gas market to fund education. Plus there are his pet projects he wants to fund with it such as renewable energy. These projects will also be affected when the prices are low. Isn’t he using West Virginia’s tax to justify this tax that he wants?

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