Bob Tomaine
Contributing Writer

Gov. Tom Wolf’s lockdown is squeezing Pennsylvania’s economy. Will he now use it to try to squeeze a severance and other taxes out of the Keystone citizenry?

It’s hard to imagine that Pennsylvania Gov. Tom Wolf isn’t laying the groundwork for a new push to impose a severance tax on natural gas.

Even as Gov. Tom Wolf’s lockdown is squeezing Pennsylvania’s economy, some of his proposals for the post-lockdown era are all but certain to raise taxes and other costs for both businesses and individuals.

The best evidence so far – and there likely will be more before the Covid-19 lockdown is over – came in his April 17 “remarks,” a manifesto that begins with some typical politician’s rhetoric about history, service and cooperation before appeals to “you” as if “you” have a choice to do anything but abide by his edicts. Then come the statement that “I want to get started on the work we need to do to build a new Commonwealth and to get our lives back” and a smooth shift into a list of what’s been done and what remains to be done.

And when a politician says “but we need to do more” he really means “we need to spend more.” In this case, the governor said “we need to do more” for hospitals and while that’s at least timely, he followed up by adding that “I’m offering the framework of a plan to increase wages for all Pennsylvanians, enact better worker protections, expand paid sick and family leave policies, and increase safe, affordable, and high-quality child care. We need to strengthen the unemployment and workers compensation insurance systems. Let’s expand student loan deferments to provide relief for individuals who are on the front lines.”

In case anyone noticed that that last part doesn’t seem to have much to do with the current state of affairs, the governor also said that “(t)his pandemic caused significant hardship for many Pennsylvanians, but it also revealed underlying hardship for many.” He then eased into some familiar territory with “a living wage,” ensuring that residents “won’t be denied health insurance coverage due to a pre-existing condition like COVID” and that child care providers’ “wages are fair and protections are in place for providers in the future.” Gov. Wolf still wasn’t done, though, and went on to say that “(l)astly, it’s past time to invest, upgrade, and extend Pennsylvania’s broadband network to ensure all Pennsylvanians have access to the internet.”

It’s a neat trick to be able to talk about that at the same time as he’s talking about crushing the economy by keeping it running as slowly as possible. Whether his actions are right or wrong, his preventing so many individuals from working and so many businesses from functioning is in direct conflict with the need to raise the revenue to pay for everything he proposes. There’s simply no way that less work and less business can generate more revenue to fund the expenditures he’s going for and there’s no way that employment is about to boom if a “living wage” and more regulations are forced onto businesses on top of the tax hikes that his dreams require.

All of which brings the story back to the severance tax on natural gas. It’s an idea that sounds wonderful to those who don’t know what it actually means and – as with the too many politicians who favor it – to those don’t care what it actually means. The Pennsylvania Oil & Gas Association site has a page that’s several years old and numbers aside, its point remains valid to those who know and care about the meaning of a severance tax.

The easiest way to explain how a severance tax would work and why it’s such a fascinatingly poor idea is to point out the taxes and fees on a typical monthly bill for wireless service. The providers aren’t absorbing those taxes and fees. They’re passing them on in exactly the same way that natural gas providers would pass them on. Of course, that argument doesn’t even address the fact that the gas industry already pays both the same taxes that other businesses pay and an impact fee.

It might be tempting to say that Gov. Wolf and his supporters have learned their lesson and won’t try yet again to impose a severance tax, but no matter how often they’re beaten down and left for dead, poor ideas never really die. They just wait for the next time that the right conditions reappear or are made to reappear.

Text and photo: Copyright 2020 by Bob Tomaine.