Gov. Wolf’s Massive, Job-Crushing Energy Tax Proposal Falls Flat, Again

A months few back, in talking with voters about Pennsylvania energy development, Gov. Wolf promised that his administration would do “everything we can to make this part of the economy thrive.” Yet during his budget address this week, the governor — once again — proposed a massive, job-crushing energy tax increase on Pennsylvania job creators and consumers.

The response? “We are not going to consider taxes on job creators,” Senate Majority Leader Jake Corman said. As in year’s past, the governor’s latest proposal for even higher taxes was “not well received locally” and was met with a “familiarly cold response” from local officials and Pennsylvania job creators.

Even higher energy taxes “along with the administration’s wave of job-crushing regulations will further harm the Commonwealth’s economic competitiveness and cost good-paying, Pennsylvania jobs,” MSC’s Dave Spigelmyer said in response to the governor’s budget address.

In fact, the state’s non-partisan Independent Fiscal Office (IFO) has confirmed that Gov. Wolf’s massive energy tax hike will sting Pa. families who would be forced to pay higher energy costs.

Communities throughout the Commonwealth would suffer too, as revenues from the current natural gas impact tax – which has generated $1+ billion for important local investments as well as statewide environmental and conversation programs – would be jeopardized.

That’s a non-starter for local officials, whose communities directly benefit from the increase in economic activity and tax revenues tied to natural gas development. In fact, the County Commissioners Association of Pennsylvania supports “maintaining existing shale gas impact fees” as the system has brought improvements in environment and infrastructure in all 67 counties.

Local supervisors and county commissioners agree. This from the Observer-Reporter:

Fallowfield Twp. Supervisor Wilbur Caldwell (R): Act 13 [impact tax] funds have been extremely beneficial to townships, especially in Washington County. We’re able to do things we couldn’t dream about before Act 13. [Losing Act 13 impact tax revenues] would be a very sad demise.

Washington Co. Commissioner Larry Maggi (D):The natural gas (tax) has been proposed before. I don’t think that would be good for the industry in Washington County. I think the impact fee (setup) the way it is now has been fair for the communities where there is drilling. We want to make sure we keep the gas industry here. It’s now making a comeback, and we don’t want to do anything to end that.

Fallowfield Twp. Supervisor Earl Sadler (D): Philadelphia…would benefit from [Gov. Wolf’s energy tax].”

Greene Co. Commissioner Blair Zimmerman (D): With the way things are going right now, I don’t think I could support [Gov. Wolf’s energy tax increase].” The natural gas impact tax “is helping us out a lot.”

Franklin Twp. Supervisor Reed Kiger (D): Certainly it’s been a real asset to us,” Kiger said of drilling and the impact tax fees. “We haven’t had to raise taxes in 30-some years. It’s saved us a lot of money.”

While we’re beginning to see some limited but encouraging signs of an energy market recovery – and the good-paying jobs that come with it – there’s intense global and regional competition for job-creating capital investment. In this challenging market, “rigs are following the money” to other, more competitive markets and states, such as Louisiana and Texas. Pennsylvania simply cannot afford more short-sighted policies – like energy tax hikes or job-smothering regulations – that “would put us at a competitive disadvantage.”

And according to a recent National Association of Manufacturers’ public opinion survey, “the overwhelming view of Pa. voters is to support increasing energy development in the U.S.”

As Pa. Chamber of Business and Industry president & CEO Gene Barr said yesterday, the Wolf “administration’s continued calls to enact another tax on the natural gas industry – especially during a time when impact fee revenues are down – will only risk the loss of further investment and job growth in the industry.”

Given the economic costs, harm to communities, and burden on consumers and working families that even higher energy taxes will bring, it’s no wonder that Franklin and Marshall College’s Terry Madonna characterized the outlook for Gov. Wolf’s scheme as “dismal.”

As elected officials tackle Pennsylvania’s budget challenges, “Governor Wolf and the General Assembly should work to advance solutions that serve to maximize the generational manufacturing opportunities and economic growth potential for Pennsylvania and its citizens.”

Join the debate online and ensure that your voice is heard: #SayNoToSeverance.