Is Gas Drilling Behind the Surplus?
A reader asks if natural gas drilling is behind April’s higher than estimated tax revenues — what legislators are now calling a “budget surplus.” It would be difficult to definitively make that claim, given that forecasts aren’t done by industry (or even by county. There is some good evidence to indicate this is the case though:
- The April collections were $273 million above estimates, $196 million of this was from the windfall in corporate taxes. (Note that this windfall in corporate tax payments above estimate for one month is $11 more than the PA Budget and Policy Center’s Severance Tax Calculator over two years).
- A May Department of Revenue report says that oil and gas companies paid $230 million through April 2011, $20 million more than all of last year.
- Sales tax collections are up in counties with significant gas drilling, and down in counties without much drilling.
- The unemployment rate is lower and job growth is higher in counties with more drilling.