Why would one of Pennsylvania’s largest natural gas producers suddenly switch from selling all non-Pennsylvania assets to purchasing a $3.3 billion Houston company that operates exclusively in Louisiana?
Range Resources, which in 2004 drilled the first commercial horizontal well in Pennsylvania’s Marcellus Shale, plans to purchase Memorial Resource Development partly because of regulatory hurdles in Pennsylvania and other Northeastern states.
Energy companies are trying to cope with constant calls for higher taxes, new methane emissions standards, a dramatic overhaul of drilling regulations, and pipeline delays. At the same time, the region is experiencing a severe and prolonged drop in natural gas prices.
The Dallas Morning News reports:
“The U.S. gas market is Balkanized," said Subash Chandra, an analyst with Guggenheim Securities. "And the Appalachian Basin is becoming increasingly isolated."
Pipeline projects in Pennsylvania and New England running into regulatory issues over the past year include Northeast Energy Direct, Constitution, Rover and PennEast. In some cases, the delay could be a matter of months; for others, longer.
Keeping the natural gas from getting to market in the Northeast makes retail prices bounce around more and can contribute to shortages in an unusually cold winter. And it pushes some producers to the sidelines for a while.
“A couple of the producers with the best cost of production in North America are sitting on their hands for a couple of years," Miller said.
In Pennsylvania, the industry has shed thousands of jobs, and the number of drilling rigs operating in the state is at 2007 (pre-boom) levels. The paper continues:
But in the meantime, the Range purchase of Memorial means Range will have options. It can push development in Louisiana while waiting for more congenial conditions in Pennsylvania.
Reporting on the transaction, Forbes says, “[P]ipeline bottlenecks in the northeast have gotten so bad that Range has been realizing sale prices 66% below market.”
Before punishing the natural gas industry with a severance tax or regulations of questionable value, Pennsylvania politicians should consider congeniality—or common sense.
Unfortunately, a lack of it seems already to have driven one company to invest $3 billion in Louisiana instead of in Pennsylvania.
The commonwealth, on net, loses one person every 12.5 minutes. Some say it's all about the weather, but a recent Gallup poll found another reason. Across the country, residents in high-tax states are more likely to want to leave than those in lower-tax states.
Decades of high taxes, growing red tape and rising debt are driving Pennsylvanians away. Can you relate? Have you left the keystone state for brighter opportunities? Share your story below and help us show Harrisburg that higher taxes are the wrong way to go.
In the Wall Street Journal, Florida Governor Rick Scott makes a mockery of Pennsylvania Governor Tom Wolf and his quest to raise taxes, calling Wolf one of his "favorite governors."
"Every time they raise taxes,” Mr. Scott says, “it’s basically a gift to Florida."
Florida’s population increased by 350,000 last year, and IRS data confirm that many were exiles from high-tax California, Connecticut and Pennsylvania.
As we've pointed out recently here, Pennsylvania has long been losing residents to other states—more than 40,000 lost in net state to state migration last year alone, or one resident every 12.5 minutes.
Pennsylvania and other high tax states are losing to states with lower overall tax burdens.
Not to worry though. Gov. Wolf has a solution! He's going to change the slogan for tourism!
Of course we all know slogans are the key to economic growth and job creation. Take this quick poll and tell us what you think Pennsylvania's new Tourism Slogan should be.
Eunice Medina is a childcare worker living in Oakland, California. Last March, the city instituted a $12.55 minimum wage, leaving Eunice with fewer workdays and reduced hours.
Across the country in East Aurora, New York, restaurant owner John Rooney just closed one of his two locations after 14 years in business:
I've got employees that have been working for me for 14 years, that we had to say goodbye to, for no other reason," Rooney said, "than that increase in the minimum wage.
Eunice and John are cautionary tales for Pennsylvania where Governor Wolf just issued an executive order to raise the minimum wage for 450 state workers and future state contractors.
Increasing the minimum wage from $7.25 an hour to $10.15 an hour for about 0.57% of state workers sounds compassionate, but experiences in Oakland, New York and many other places show higher wage mandates lead to fewer job opportunities.
Of course, the Commonwealth isn't like a regular employer. Instead of layoffs, politicians will simply pass on the $4 million cost of this mandate to taxpayers.
Interestingly, after lauding his executive order, Gov. Wolf seemed to acknowledge that wage mandates are a burden. When asked if the wage increase will affect human service workers, the governor explained they didn't want to place further burdens or pressure on human service workers absent a budget.
The Independent Fiscal Office confirmed the governor's concerns in a report it relased on the costs of raising the minimum wage, concluding it would keep or put 31,000 Pennsylvanians out of work. Some may argue this is a necessary tradeoff to reduce poverty, but research from the Employment Policies Institute found no statistically significant evidence that a higher minimum wage reduces participation in means-tested welfare programs.
If Gov. Wolf and other policymakers are truly concerned about lifting people out of poverty, they should pursue the following refroms:
Lower the cost of doing business: It is possible to raise wages and increase hiring at the same time. According to a Mercatus Center study, a one-percentage point drop in the corporate tax rate would likely increase annual economic growth by 0.1 to 0.2%.
Reward hard work: Restructure welfare programs to avoid the arbitrary benefit cutoffs discouraging employment and trapping families in poverty.
Lower barriers to employment: Scale back professional licensing to give low-wage earners the opportunity to increase their incomes through entrepreneurship.
Residents in states with high taxes to want to move out, according to a recent Gallup poll. This includes 33 percent of Pennsylvania residents.
This shouldn't be a shocker—Pennsylvania families have been voting with their feet for a long time.
Just last year, Pennsylvania lost 41,600 residents on net from state-to-state migration, nearly the entire population of York, Gov. Wolf’s hometown. That's one person leaving every 12.5 minutes.
From 1992-2014, the commonwealth lost $11.6 billion per year in adjusted gross income—and more than $350 million annually in state income tax revenue—due to state-to-state migration.
As I point out in a recent op-ed, Gov. Wolf's tax and spend agenda will only accelerate this "brain drain:"
Where are families moving? To North Carolina, Florida and Delaware—where state and local tax burdens are significantly lower.
States with the largest migration losses over the past five years — including Pennsylvania — had a higher average state and local tax burden (10.93 percent) than those with the greatest gains (8.84 percent).
The lesson is simple: People vote with their feet. Out-of-control spending and burdensome taxes change a state's future. To many, America's Keystone State is looking more like an exit door and Wolf's policies will push it ever wider.
Wolf's latest budget calls for a tax hike of $850 per family of four—that's on top of the existing state and local tax burden of more than $18,000 per family. In all, Wolf demanded an astonishing $3.6 billion in new taxes, including an 11 percent retroactive personal income tax increase. If Wolf gets his way, you'll owe higher taxes on money you've already earned.
If Gov. Wolf succeeds in raising Pennsylvania’s personal income tax from 3.07 percent to 3.30 percent (an increase of 7.5 percent in the rate), what will be the impact on job creation? Over 6,500 jobs that would have otherwise been created will not exist.
In collaboration with economists at Suffolk University’s Beacon Hill Institute, CF used an economic modeling program—Pennsylvania State Tax Analysis Modeling Program (PA STAMP)—to analyze the impact of Wolf’s tax proposals on job growth. And the projection for Wolf’s most recent scheme is not pretty for working families in the commonwealth.
Worse, the 7.5 percent increase in the income tax rate accounts for merely half of the revenue expected to be extracted from taxpayers—from a myriad of still-evolving tax increases—in the most recent tax hike proposal. The 6,500 job loss projection does not account for potential tax hikes on movie tickets, digital downloads, businesses filing fees, bank shares, lottery winnings, and cigarettes.
Let your representative and senator know Pennsylvanians can't afford higher taxes. Too many jobs are at stake.
Given the rumblings of an imminent vote on higher income taxes, it's important to remember what happened 12 years ago (nearly to the day!) with our state budget.
Ed Rendell was governor. Republicans controlled the House (108-95) and Senate (28-22). Republicans passed a no-tax-increase budget in early 2003 and were poised to reject job-crushing tax hikes. The governor had line-item vetoed education spending and was holding kids’ education hostage to get his tax increases. Sound familiar?
Gov. Rendell had demanded a 30 percent increase in the Personal Income Tax. I vividly remember Senate leaders in mid-November as they declared their steadfast resolve to not vote for higher taxes. Many expected the House and Senate would hold the line on tax increases. The public was with them!
But then, just before Christmas, the dam burst. 30 Republican representatives and 14 Republican senators–against the will of the majority of their majority–joined with enough Democrats to pass a 10 percent increase in income taxes. Governor Rendell signed the bill on December 23, 2003.
The borrowing of billions followed quickly in 2004, with massive spending increases each year thereafter.
Much has changed since Rendell’s first year in office. Over 76 percent of the House and Senate has turned over. The Republican majority is the largest in 60 years. What hasn't changed, however, are the forces that profit from Big Government: the government unions, which remain as powerful and wealthy as ever before.
And yet here we are today. Will the legislature agree to massive tax hikes without meaningful pension or liquor reforms?
Will 2015 be a repeat of 2003?
Gov. Wolf’s year-long pursuit of higher taxes shouldn’t end like Gov. Rendell’s. History doesn’t need to repeat itself.
At the beginning of 2015, we heard a lot about a "fresh start" for Pennsylvania. But nine months later, it's difficult to identify anything fresh about Gov. Wolf's tax, borrow and spend plan.
In fact, Philadelphia Daily News columnist John Baer pointed out that every Pennsylvania governor since the 1970s has raised taxes. Reading that, I naturally thought, “Yeah, well maybe we should stop doing that.”
Some Democrats argue that tax increases are part of responsible governing, noting that every governor elected since the '70s - Milton Shapp, Dick Thornburgh, Bob Casey, Tom Ridge, Ed Rendell, Tom Corbett - raised taxes (the argument is Corbett's fuels-tax hike for $2.3 billion in road and bridge repairs counts).
But Republicans say maybe that's the problem. Maybe the state's economy would be better with lower taxes.
Nate Benefield, of the conservative Commonwealth Foundation, makes the case against raising taxes: "Overall, our tax burden has gone up, and yet we have stagnant growth, among the slowest in the country."
Pennsylvania's ranking in state and local tax burden, according to the respected D.C.-based Tax Foundation, is 10th heaviest among states and third heaviest among the most populous states, behind New York and California.
In other words, for 45 years Pennsylvania politicians have been raising taxes—resulting in anemic job growth, income growth and population growth.
- Since 1970, spending has increase by an inflation-adjusted $13,800 per family of four, or $3,450 more per resident.
- As a result, Pennsylvanians labor under the 10th highest tax burden in the country, up from 20th in 1977 and 25th in 1991.
- From 1970 to 2014, Pennsylvania has ranked a dismal 49th in job growth, 45th in personal income growth, and 48th in population growth.
Ironically,Gov. Tom Wolf suggests his $4.6 billion, $1,400 per family of four tax increase represents a new way of doing things in Harrisburg. Raising taxes to historic highs, while rejecting real pension reform or liquor privatization, isn't fresh or innovative. It's the same thing we’ve been doing for decades.
It’s time we stop repeating the same failed mistakes of the past.
What do Switzerland, the United Arab Emirates and Canada have in common? Their citizens all enjoy more economic freedom than Americans.
According to the 2015 Economic Freedom of the World Index, the United States ranks 16th, down from a rank of 2 in 2000. Americans are losing their economic freedoms while the rest of the world is becoming more free.
The Economic Freedom of the World Index measures economic freedom by analyzing five areas: size of government, legal structure and property rights, access to sound money, free trade, and regulation. The U.S. scored the lowest in the size of government and protection of property rights categories.
Economic freedom is more than an academic concept; it's critical for prosperity. Economic freedom is positively associated with higher average per-capita GDP, longer life spans, higher incomes for the poor and more civil liberties.
To read more about the benefits of expanding economic freedom visit www.freetheworld.com.
Uber and Lyft provide inexpensive rides to customers across the country despite numerous regulatory hurdles—chief among them the Philadelphia Parking Authority, which has previously thwarted the businesses from operating within the city. Recently introduced Senate Bill 984, however, would allow Uber and Lyft to compete in Philadelphia.
This legislation, sponsored by Sen. Camera Bartolotta, establishes the framework under which ridesharing companies can freely and safely operate within all 67 counties of the commonwealth. SB 984 requires background checks and a zero tolerance policy on drug and alcohol use for prospective drivers. Uber and Lyft will also be required to maintain insurance coverage and abide by vehicle safety regulations.
According to a recent study from the Cato Institute, many concerns surrounding ridesharing are unfounded. Critics typically point to safety concerns as their primary objection, but Uber and Lyft actually offer a safer alternative to the taxicab monopoly—both for drivers and passengers.
A major factor ensuring this increased safety is the utilization of an electronic payment system. All Uber and Lyft transactions are completed via their respective smartphone apps. This eliminates many of the risks facing drivers. Since cash never changes hands, drivers are less vulnerable to robbery.
Additionally, unlike a traditional taxi service, where passengers are anonymous, Uber and Lyft customers must create electronic profiles to use the ridesharing services. These measures ensure added safety for drivers, as any criminal activity could easily be linked to a user’s profile information stored on the ridesharing app.
The structure of Uber and Lyft protects the passengers, too. The passenger knows the name of the driver, the make and model of the car, and the license plate number upon ordering a ride.
Immediately after the ride is over, the passenger can rate the driver from their smartphone, which gives passengers influence over future demand for the driver. Indeed, user ratings, combined with the ability to choose your driver, provides riders far more protection than government licensing mandates.
Sen. Bartolotta’s legislation will increase competition and provide consumers with more options at better prices. It’s time to bring ridesharing freedom to Pennsylvania.
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