MSC in Pottstown Mercury: Higher Energy Taxes Will Hurt Natural Gas Industry, Pa. Jobs

A Feb. 22 editorial claiming the “Extraction tax on natural gas should be considered,” fails to acknowledge critical facts about new energy taxes and the basic economic realities associated with such policies, especially as it relates to capital investment and continued job growth.

While the paper believes that higher energy taxes are the “least painful” choice, the more than 243,000 Pennsylvanians working in the natural gas industry would disagree. And the more than 45,000 union construction workers that shale-development has put back to work would disagree. In fact, according to public opinion research, when given a choice between higher energy taxes and jobs, a clear majority of Pennsylvania voters chose jobs.

Despite the paper’s claims, higher energy taxes will discourage capital investment into the commonwealth and make Pennsylvania less competitive. Capital flows like water and higher taxes will absolutely drive capital and jobs elsewhere.

And while the paper believes new energy taxes will close Pennsylvania’s billion-dollar deficit, the Associated Press reported that new energy tax revenue predictions have been wildly overstated. Moreover, according to the Pew Charitable Trusts, West Virginia and other states dependent on severance taxes are facing “huge budget problems” as oil and natural gas markets remain depressed globally.

Finally, Pennsylvania’s communities would lose a large source of critical funding for local improvements as the state’s special impact tax, which will generate nearly $830 million by April, could be eliminated. Look no further than the $3.4 million for 12 bridge repair projects in Montgomery County to see the direct benefits that natural gas impact taxes create for Pennsylvania’s communities. Local government officials, including the Pa. State Association of Township Supervisors, are “very concerned about the loss of these local impact fee revenues, which are invaluable to our townships and their taxpayers.”

Labor leaders, small businesses, as well as local and county government share our deep concerns about the negative effects — especially as it relates to job growth and community investments from shale impact tax revenues — that even higher energy taxes will have on the commonwealth’s economy. Pennsylvanians are looking to their elected officials to help create new jobs, not higher energy taxes.

Erica Clayton Wright
Marcellus Shale Coalition
Pittsburgh, Pa. 

NOTE: Click HERE to view this letter online.