A new study from the Beacon Hill Institute at Suffolk University finds that Pennsylvania's Alternative Energy Portfolio Standards will costs Pennsylvanians millions in higher energy costs.
Pennsylvania must undergo a rapid transformation to reverse the poor policy decisions that have eroded economic freedoms and brought the state to its present condition. To provide a roadmap for success in this critical endeavor, the Commonwealth Foundation has compiled a list of 80 policy recommendations for Gov. Corbett and state legislators to help lead a Pennsylvania comeback. Each of these recommendations links to Commonwealth Foundation research with more information on
A lot can be spun from the results of the Nov. 2 elections, but one fact is uncontrovertible: Pennsylvanians are sick of centrally planned, highly regulated, gimmick-driven economic policy. It hasn't worked, and now they want results.
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Promoters of the U.S. Environmental Protection Agency’s carbon-emission regulation attempt to playdown the jobs it would kill with promises of “green jobs”. Yet these positions pay less and are largely dependent on unreliable taxpayer subsidies for solar and wind.
"We are applying for federal grants to retrain miners for jobs that will pay less than half of what they can make in the mines,” says Robbie Matesic, executive director of the Greene County Department of Economic Development. “The hardest thing is telling a third-generation coal miner that the layoff this time isn’t just a fluctuation in the market, but will be permanent.”
A combination of tightening environmental regulations and competition from natural gas has the coal industry struggling for survival. The latest EPA effort to combat global warming seeks to sharply decrease emissions of carbon dioxide from power plants, but it's projected to reduce the earth’s temperature by less than one-tenth of a degree Celsius by the year 2100.
Still visions of green jobs are routinely advanced by environmental interest groups, President Obama and other politicians as they push EPA’s “Clean Power Plan.”
“When you shift to renewables, you’re creating good green jobs in wind and solar,” says state Rep. Greg Vitali (D-Delaware and Montgomery). “It’s really a job creator when you’re shifting to renewables.”
Sounds nice: You replace “dirty” coal with trouble-free “green” jobs. No fuss, no muss, just nirvana. But it hasn’t worked in the past, according to the Pittsburgh Post-Gazette’s PowerSource:
“The solar sector in Pennsylvania has shed 30 percent of its workforce since 2012, when the state ranked fifth in the country with 4,000 jobs, according to (The Solar Foundation). Pennsylvania’s 2,800 jobs in 2014 placed it at 15th in the country and, when looked at as a percentage of the state’s working population, the state dropped to 37th…
“Factors in the shift include a Pennsylvania rebate program that vanished, a federal tax credit that is scheduled to wane and the fact that the state’s market for renewable energy credits — designed to incentivize projects and prove compliance with the state’s renewable goals — has suffered from oversupply with credits purchased from other states.”
The Pennsylvania Manufacturers’ Association estimates that each green job costs taxpayers $300,000 in subsidies.
Back in Greene County, Ms. Martesic sees more possibilities for displaced coal workers in metals and advanced materials manufacturing, although she says that the transition will take more than “a year or two” that regulators currently are allowing. She also says manufacturing will require “reliable energy” supplies. In other words, energy that’s available when the sun isn't shining and the wind isn’t blowing.
With the possible demise of coal-fired plants that supply 40 percent of the state’s electricity, and the limitations of today’s renewables, it is disingenuous to ignore the significant job losses Pennsylvanians will experience if the EPA gets its way.
The radical environmentalist group and corporate welfare lobbyist PennFuture has updated an absurd study about the "subsidies" Pennsylvania taxpayers pay for fossil fuels. While we oppose subsidies for any industry, most of PennFuture's "subsidies" are the absence of higher taxes on consumers.
PennFuture's analysis show less than $60 million in actual direct subsidy for fossil fuels (some of which is for alternative energy programs). What they consider a "subsidy" is not taxing certain goods and services.
Most of their "subsidy" total comes from not applying the sales tax to gasoline and electricity. That is, taxpayers would "save" by paying more in sales tax at the pump and in their heating bills.
But wait, you must be thinking, don’t we have a gasoline tax and an electricity tax?
Why yes, yes we do. They are claiming we are subsidizing gasoline by taxing it, but not taxing it twice.
- Almost 44 percent of these "subsidies" are for NOT imposing the sales tax on gasoline. Yet gasoline is taxed separately under the Oil Company Franchise Tax. In fact, as of 2015, Pennsylvania has the highest state gasoline tax in the nation.
Gasoline is exempted from the sales and use tax for that reason and that reason alone—it doesn't make any sense to double-tax a product. To suggest state taxpayers are "subsidizing" gasoline production by imposing a tax on gasoline (but not two taxes) is beyond ridiculous.
- Another 20 percent of these "subsidies" are for not imposing the sales tax on electricity and heating fuel. Again, these utility bills are taxed separately under the Gross Receipts Tax. Making consumers pay another tax on their electric bill or heating bill does not repeal a subsidy, and in certainly doesn't save taxpayer.
Both of these tax exemptions—making up almost two-thirds of PennFuture’s estimates of "subsidies"—suggest we should impose taxes on top of taxes on consumers at the pump or in their utility bills. Either PennFuture doesn't understand how taxes work, or are deliberately misleading their readers, but either way, they what they are suggesting is higher taxes on families.
Other "subsidies" include not taxing the government for its use of fuel (because we don’t tax the government for anything) and not imposing property taxes on the value of natural gas. This is a tax that would hit homeowners; it is not a subsidy for the businesses.
PennFuture seems to have no idea what a subsidy actually is. Ironically, they are lobbying for new subsidies, specifically $225 million in subsidies for alternative energy under Governor's Wolf budget proposal.
Worse yet, these subsidies will come from borrowed dollars. Governor Wolf wants to borrow funds and pay it back (with interest) using a new tax on natural gas severance. In other words, PennFuture not only wants to double-tax fossil fuels, they want to place a special tax on natural gas to subsidize cronies in the wind and solar power industry.
It's clear that these subsidization schemes not only punish taxpayers, but fail to create jobs. Pennsylvania continues to see anemic job growth, despite $2.9 billion in taxpayer-financed alternative energy loans and grants since 2003.
One third of the $675 million in new corporate welfare under Governor's Wolf budget proposal is reserved for alternative energy programs. In this week's House budget hearings Community & Economic Development Secretary Dennis Davin defended the new borrowing saying,“We think when you look at those opportunities as a whole ... Pennsylvania will do much better.”
But history indicates otherwise.
A common target of Gov. Rendell's "economic development" schemes was alternative energy companies, who enjoyed $1 billion in renewable energy grants, tax breaks and loans, but only created 8,300 "green" jobs, costing taxpayers over $120,000 per job. In other words, using tax dollars to subsidize green jobs resulted in a net loss.
Worse yet, taxpayers don't have the funds for this program. The Governor wants to borrow the money and pay it back with natural gas severance tax revenues.
Even if placing more debt on Pennsylvania families created jobs, it is still wrong to ask the natural gas industry to subsidize their competitors. Kevin Sunday with the PA Chamber put it well, "It's very ironic that Gov. Wolf expects one industry to subsidize its competitors," he said. "We certainly shouldn't be picking winners and losers."
At the end of the day, Pennsylvania has given more than a billion dollars to alternative energy companies with nothing to show for it: from 1991 to 2014, our state ranked a dismal 45th in job growth. Handing out tax dollars based on political calculations is stifling economic progress. Common sense tells us it's time to try a different approach—letting Pennsylvanians keep more of their money.