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AUGUST 17, 2010 | Commentary by NATALIE ROGOL
Time to Exit Rendell's Road to Higher Taxes
Governor Rendell has proposed a series of tax increases to fill a $415 million transportation funding deficit created when the federal government rejected his plan to toll I-80 for a third time. The state's highway system is in sorry condition, but not because taxpayers pay too little. Pennsylvania spends more on transportation
AUGUST 3, 2010 | Commentary by DOUG MCLINKO
Gas Fuels Growth
The national economy is in a slump, unemployment remains stubbornly high, and economic growth is being hampered by misguided policies. Meanwhile, Bradford County, Pennsylvania led the Commonwealth of Pennsylvania in net job growth from March of 2009 through March of 2010 with 2500 new jobs or a 7.2% employment increase. The robust increase
JUNE 29, 2010 | Policy Points by COMMONWEALTH FOUNDATION
Pennsylvania Budget Facts 2010: Corporate Taxes
The Commonwealth has the second highest state corporate income tax (behind Iowa, which has more generous deductions and exemptions). When compounding state and federal corporate taxes, Pennsylvania's corporate income tax rate is higher than that of every other country.
Recent Blog Posts
SEPTEMBER 2, 2010
Dan Onorato's Natural Gas Tax
Gubernatorial Candidate Dan Onorato held a press conference yesterday announcing he supports a tax on natural gas extraction in Pennsylvania (and that he kinda-sorta opposes other tax hikes). But he offered no details about his plan. However, I will attempt to translate his political statements into a policy position using quotes from PA Independent and Politics PA:
"Not a penny of [the severance tax] will go to balance the General Fund. I'm talking about using that to protect the environment, protect infrastructure, and to deal with all the problems that could possibly come from the Marcellus Shale industry," said Mr. Onorato. He said the DEP needs more funding to investigate and oversee the gas industry's activities in the state.
This is clearly different from Gov. Rendell's proposal, which would generate $70 million to balance the state budget for his pork projects. Onorato's plan would dedicate funding to the Department of Environmental Protection for costs (though DEP claims they have enough funding already, see below), another round of Growing Greener, and other "problems" related to drilling.
In fact, if the tax is only to be used for problems related to drilling, Mr. Onorato should insure funding goes only to places where drilling occurs -- preventing his home county, Allegheny, and the Philadelphia region from receiving any of the gas revenue.
Onorato's plan calls for a "competitive” tax rate "comparable" with what other states have levied, but he declined to name an exact rate despite repeated prodding from reporters.
To be competitive with other states, Onorato would only support a tax with a lower rate in hard-to-drill areas, or that delays implementation in the first few years -- as almost every state with a severance tax on shale gas currently does. Onorato would also have to dramatically lower Pennsylvania's overall tax burden, as other states have used their natural resource taxes to do. He could imitate Texas or Wyoming, as some have advocated, and eliminate both the Corporate Income Tax and the Personal Income Tax.
"Tom Corbett thinks taxpayers should foot the bill to clean up and protect the environment. I think the drillers should pay for it."
Now I'm unclear if Onorato is calling for a tax at all. DEP officials say they have enough funding for drilling oversight. In 2009, the DEP raised drilling permit fees from $100 to as high as $5,000 -- generating $12 million this year, a 1,600% increase over last year. And fines pay for environmental remediation; for example, the Clearfield well blowout resulted in $400,000 in fines, while the clean-up and investigation cost only about $50,000.
Also, drillers are spending money to improve roads, even without a tax. Anadarko, for example, has decided to upgrade roadways rather than make continuous repairs. In Bradford County, Chesapeake Energy has already invested $15 million in road repairs with another $15 million in projects planned before the end of the year. And drilling companies have paid over $400 million in other state and local taxes.
Onorato uses environmental and road concerns to justify a natural gas jobs tax. Yet there is no reason to think additional money, above what is already being paid by the industry, is needed for these purposes, and no proposal currently introduced would use the revenue in this manner.
posted at 10:39 AM | 0 comment
SEPTEMBER 1, 2010
Should Higher Taxes be a "Priority"?
Here is a letter I sent the Patriot News on a natural gas jobs tax:
Your August 31 editorial states that a natural gas tax should be the state legislature's "No. 1 Priority". This seems to be a solution looking for a problem. Which of the many issues facing Pennsylvania would a tax on this job-creating industry solve?
While your editorial uses environmental concerns to drum up support, a tax would do nothing to protect the environment. In fact, the revenue from the proposed tax would not even go toward environmental protection, but rather to the General Fund to finance Gov. Rendell's pork spending.
Gas drillers are paying for the cost of environmental inspections through license fees and mitigation costs through fines. Drillers are putting millions into repairing and even improving local roads. And the revenue drilling already brings-corporate income taxes, leasing fees and royalty payments, and income taxes from local job creation-is overlooked.
If companies were forced to pay another tax, where would that money come from? Certainly not from a pot of money hidden under a corporate CEO's mattress, but from future investment in Pennsylvania, wages for workers, or even companies' spending on safety measures.
The notion that an industry should be taxed simply because it can be taxed is more than just faulty logic. It's bad policy.
posted by NATHAN BENEFIELD | 10:40 AM | 0 comment
AUGUST 27, 2010
Had Enough Skewed Polls from Gov. Rendell Yet?
Ed Rendell's "campaign" financed a new poll which was then given to the Governor's Office to distribute, as well as to the propaganda arm of DEP and a nonprofit group that reportedly does no lobbying (which tweeted the results a day before they were released to the public).
This poll supposedly shows that 78% of voters support a tax on natural gas. Here's the question:
As you may know, Pennsylvania is home to one of the largest natural gas deposits in the world, known as the Marcellus Shale. Large multi-national gas drilling companies from other states and other countries are coming here to lease land and extract this gas. This discovery holds the promise of significant economic development and the creation of new jobs, but it has also placed new and difficult stresses on local services, harmed water supplies, and destroyed local roads.
In other states, these companies pay a special tax to fund programs that will protect our environment and help local governments handle the increased demand on their services. Would you favor or oppose a special tax on these multinational gas companies for that specific purpose?
But there is no proposal that would give all the severance tax revenue to environmental concerns and local infrastructure. Suggesting that Gov. Rendell's natural gas jobs tax would be "for that specific purpose" is a distortion. Rather, Gov. Rendell wants this money to fund his overspending on pork projects.
Further, the proposal is not patterned off of the taxes in most other states -- which typically include exemptions for hard-to-drill areas and in the first few years of production. Gov. Rendell's tax hike is higher than in most other states, and would only add to Pennsylvania's tax burden, already the 11th highest in the nation. (Contrast that with states like Wyoming and Texas, which have a severance tax, but no income tax, and no corporate profits tax.)
Governor Rendell's poll continues to mislead the public by leaving out the fact that drilling companies are required by law to repair road damages and rectify environmental contamination, and are currently putting millions into repairing roads.
Finally, Gov. Rendell's poll trickery is undermined by previous polls showing far less support for a natural gas tax. These include an industry-funded poll by Harris Interactive, the May 2010 Franklin & Marshall poll, and even pro-tax PennFuture's misleading poll showed barely over 50% supported the tax.
|
|
Gov. Rendell's Poll |
Harris Interactive |
F&M |
Pennfuture's Poll |
|
Support Tax |
78% |
30 |
45 |
53 |
|
Oppose Tax |
14% |
60 |
44 |
37 |
posted by NATHAN BENEFIELD, KATRINA CURRIE | 05:30 PM | 0 comment
