Additional Severance Tax Threatens PA's Fastest-Growing Industry

 

In his efforts to raise nearly $5 billion in new state spending, Gov. Tom Wolf has proposed that the natural gas companies that comprise Pennsylvania's fastest-growing energy industry pay an additional tax to the Commonwealth. His plan calls for a 5 percent severance tax, along with a 4.7 cent fee for every 1,000 cubic feet of gas that's drilled.

 

The fact is that Pennsylvania already has a tax in place. It's called the impact fee, and it was passed through Act 13 of 2012 – the state's comprehensive Marcellus Shale oversight law. Since Act 13 became law, more than $630 million has been generated through the impact tax which equates to approximately a 3 to 4 percent severance tax. This very competitive rate has encouraged natural gas companies to invest in Pennsylvania, making the Keystone State a hotbed of shale activity and creating thousands of good paying, family sustaining jobs in the core, ancillary and supply chain industries.

 

Impact tax revenues also filter directly into all 67 Pennsylvania counties, allowing local governments to make critical investments in key infrastructure and general improvement projects. The interactive map below illustrates just how important impact tax funding has become to rebuilding local communities across the Commonwealth.



Click on region below to see how the Impact Tax is helping in our state.

Northeast  $10,438,295.00
Carbon $172,210
Lackawanna $627,657
Luzerne $848,408
Monroe $448,106
Pike $150,804
Schuylkill $390,261
Wayne $138,986
Wyoming $7,661,863


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Southcentral:  $6,369,355.00
Adams $268,221
Bedford $191,997
Blair $701,253
Cumberland $627,584
Dauphin $711,107
Franklin $398,186
Fulton $75,000
Huntingdon $182,255
Juniata $75,000
Lancaster $1,383,989
Lebanon $355,397
Mifflin $123,665
Perry $121,349
York $1,154,352


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Northwest: $31,987,653.00
Erie $742,261
Butler $9,695,755
Cameron $834,695
Clarion $1,029,943
Clearfield $8,331,295
Crawford $342,604
Elk $2,874,984
Forest $729,577
Jefferson $1,614,019
Lawrence $1,213,650
McKean $3,147,778
Mercer $849,329
Venango $332,392
Warren $249,371


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Northcentral  $180,495,325.00
Bradford $60,255,571
Centre $3,697,845
Clinton $5,174,796
Columbia $299,420
Lycoming $32,790,664
Montour $75,000
Northumberland $249,867
Potter $3,654,145
Snyder $105,044
Sullivan $3,767,751
Susquehanna $34,507,088
Tioga $35,799,370
Union $118,764


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Southeast:  $13,471,216.00
Berks $1,090,960
Bucks $1,656,270
Chester $1,330,650
Delaware $1,480,437
Lehigh $932,489
Montgomery $2,126,775
Northampton $789,318
Philadelphia $4,064,317


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Southwest $104,299,744.00
Allegheny $4,426,107
Armstrong $4,746,011
Beaver $1,595,980
Cambria $700,285
Fayette $11,183,567
Greene $25,396,960
Indiana $2,344,983
Somerset $1,213,841
Washington $40,502,408
Westmoreland $12,189,602


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northcentral northeast southeast southwest southcentral northwest

 

Unfortunately, impact tax revenue at the local level would be capped under Governor Wolf's plan and the additional money would go right into a General Fund for Harrisburg lawmakers to spend how they see fit. To make matters worse, the governor's severance tax proposal ignores the market price of natural gas by setting a $2.97 cent tax floor. This would increase the effective rate of the 5 percent tax, and would turn Pennsylvania from an attractive place for industry growth into one of the LEAST competitive states in the shale play.

 

To prevent the inevitable job loss and decline in economic growth that would result from such a move, the PA Chamber is working to keep the impact tax in place. Visit www.stopnewenegytaxes.com to learn more and take action against Governor Wolf's severance tax proposal! Read our coalition letter here.

 

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