Tom Wolf’s Severance Tax Threatens to Destroy, Not Restore, PA

Gina Suydam
President
Wyoming County Chamber of Commerce

Pennsylvania Governor Tom Wolf says he wants to “Restore PA” with a severance tax that will only destroy what the Commonwealth has gained from natural gas.

Natural gas is revitalizing Wyoming County. As a lifelong resident of Tunkhannock and now in my role representing the county’s business community, I can speak firsthand to the positive impact that the industry has had on our region and the promise it holds for even more economic potential.

Severance Tax

Williams, the pipeline company, built this new office building near Tunkhannock

According to the Pennsylvania Independent Fiscal Office, in 2018 Wyoming County was the Commonwealth’s sixth-largest producer of natural gas. Over the past six years, the county has received more than $19 million in impact fee revenues — money paid by the industry that goes directly to local governments to help fund critical projects.

Additionally, residents throughout the county whose properties are above the shale have benefited from royalty fees and there have been increased employment opportunities and lower energy costs. Overall, our community is thriving in large part due to the natural gas industry.

There’s even more potential on the horizon. An innovative partnership between the Wyoming Chamber, Wyoming County government and UGI Utilities is working to build out the needed infrastructure to increase the accessibility of natural gas to county residents and businesses. The Chamber recently was awarded a grant by the state for the next phase of a public natural gas service project which will expand natural gas service to the region.

But a severance tax — as proposed in Gov. Tom Wolf’s “Restore PA” initiative — threatens to undo all of these benefits. As noted above, the natural gas industry is already taxed. The impact fee has brought in more than $1.7 billion since it was enacted — money that has benefited every single county in the state, including mine.

The current system ensures that local communities benefit from these revenues — which are allocated to each county based on a fair formula. The state isn’t picking winners and losers, and Harrisburg isn’t in charge of where those dollars go.

Additionally, the natural gas industry has brought economic activity to rural communities statewide. Regions that once had high unemployment rates and were economically stagnant are now flourishing as a result of direct and indirect employment opportunities. Ancillary and downstream businesses have realized new potential.

A severance tax puts this all at risk.

The industry might not stay if it isn’t profitable to do so. Pennsylvania already has one of the worst corporate tax rates in the country. Adding another tax burden would naturally lead natural gas companies to think of relocating to other states in the shale play — hurting our competitiveness in the critical energy arena and dimming the light on our now thriving communities. Also, a severance tax puts in jeopardy the revenues that are currently going to local governments.

I encourage the state’s elected officials to take a page out of Wyoming County’s book and find ways to work with the industry to capitalize on the opportunities afforded by natural gas. Policies that encourage growth and further development of our natural gas resources will help to put Pennsylvania, its residents and job creators on the path to prosperity.

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5 thoughts on “Tom Wolf’s Severance Tax Threatens to Destroy, Not Restore, PA

  1. Governor Wolf needs to seriously get his spending under control before he goes for more taxes. His administration is a DISASTER…spending money must stop.

  2. But we still live with out a water supply OVER CABOT oil and Gas explan That to me ! Demock was messed up we had good water ….they paid off the people lift a moratorium and now We end up in the Bull shit after and Cabot new This cood Happen just as well as DEP !

    • Maybe Wolff should come out and see first hand what has & continues to happen. He should should read our leases & addendums. It’s about time some people are held accountable.

      Gov Wolff I invited you to come to Dimock and see! I seriously doubt that you would find what has & continues to be done acceptable. You wouldn’t allow this to happen to your home & family. Neither would the Dep or the gas company minions, attorneys, or higher ups.

      Gov Wolff Dimock has been said to be ground zero. Real leaders come out to ground zero.

      We invite you as well as the head of Dep & Cabot to come here and see for yourself.

      We have had more than enough of the run around, inaccurate information, no responsibility, leases that are not honored, dep regulations that aren’t upheld, employees who are lacking in knowledge & skill, inaccurate responses, supposedly poor to no record keeping, investigations that are hidden from homeowners, or not properly done & relied on as fact, and no accountability or results.

      Come visit us Mr Wolff do the JOB you were elected to. Is’s about time that some elected official comes out and gets to the bottom of this.

      How can You make decisions that effect everyone in the state when You haven’t seen for yourself and don’t seem to care!

      Come on out Wolff! Get to the bottom of this! Do the job you were elected to. Don’t be a pencil pusher. It’s about time someone stands up and cleans house.

  3. Excellent piece, Gina! There is another benefit for rural populations who are helping the NG Revolution. As Sue Mickley has pointed out, it has has improve health care with better accessibility and better facilities.

    Keep up the great work. Energy education is our best work and our most important calling.

  4. So let’s set a few things straight. The impact fee is paid for by the gas company but comes from certain landowners Royalities dependent upon your lease agreement. Which you still have to pay income on. But you never had it. Which in turn drops your minimum Royalities lower then 12.5% which is the state law which no politician cares that there landowners aren’t getting. Depending on your lease agreement. But if a severance tax happens all landowners will have to pay. Read the fine print.

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