Chamber Minute

February 2018

Hi, I’m Gene Barr, president of the Pennsylvania Chamber.

Welcome to this month’s Pennsylvania Chamber Minute.

Governor Tom Wolf presented his fourth budget address to the General Assembly earlier this month. The proposal would spend about $33 billion – just over 3 percent more than was spent this year. And, for the fourth consecutive time, the governor is calling for another tax on the natural gas industry.

The governor’s reasons for asking for a severance tax again might be confusing to some, who see no real reason to increase taxes when the economy is on the upswing. But make no mistake – the reasons that a severance tax will once again be hotly debated his budget season have not much at all to do with the economy and pretty much everything to do with protecting the status quo.

At the center of the severance tax support base are big government unions that funnel millions of dollars a year into the political system and enjoy all the benefits that big government provides – including two bloated state pension systems that combined make up about 15 percent of the General Fund budget. Union leaders’ mentality is to protect those benefits at all costs, and is the main reason why property taxes have skyrocketed across the state. That’s why they remain fixated on getting a severance tax enacted, because securing a new annual revenue stream to help bring more money into state coffers helps their bottom line.

But in their ongoing call for natural gas companies to pay their “fair share” – and at more than $1.2 billion in impact tax revenue alone, we’d say that the industry is already paying more than its fair share – unions are missing something. Higher taxes get passed down to consumers in the form of higher bills. To put it bluntly, if a severance tax gets enacted, millions of Pennsylvanians will be paying more in home heating costs so that government unions can keep their benefit packages intact. We think that’s wrong. And that’s why this budget season, we’re continuing to lead efforts to fight back against a severance tax and ensure that the natural gas industry – or any industry – isn’t singled out to help prop up a benefits system that we simply can’t afford.

Thanks for spending a minute of your time with the Pennsylvania Chamber, the Statewide Voice of Business.