Wolf’s Gas Tax Won’t Help Students, but Will Kill Their Job Opportunities

Commonwealth Foundation
Contact: 717-671-1901

Wolf’s Gas Tax Won’t Help Students, but Will Kill Their Job Opportunities

Natural Gas Industry Already Pays Billions to Fund Government

Good morning,

Today, Governor Wolf unveiled his plan to impose a natural gas severance tax on Pennsylvania’s most promising industry to boost funding for public schools. He, unfortunately, rehashed disproven campaign rhetoric on a mythical $3 billion in education funding cuts under his predecessor Gov. Corbett to justify his plan.

“What’s most surprising about today’s announcement is Governor Wolf’s faith that throwing money at schools, which already receive $3,000 more funding per pupil than the national average, is an effective way to help students,” commented Elizabeth Stelle, director of policy analysis for the Commonwealth Foundation. “The reality is, he’s driving away future job opportunities for those same students. Education spending at an all-time high, yet standardized test scores are stagnant. If Wolf wants schools that teach, we need real solutions—throwing money at the problem isn’t a solution.”

Even more worrying, given Wolf’s private sector business background, is his eagerness to levy an additional tax on one of the rare bright spots in Pennsylvania’s economy, which already pays the highest effective corporate income tax in the industrialized world.

Stelle also called Wolf’s contention that other gas-producing states like Texas have a severance tax while Pennsylvania does not “a tired straw man that ignores the host of other taxes and fees Pennsylvania drillers pay.”

Indeed, Texas does not have a corporate income tax or personal income tax, dramatically lowering the effective tax burden on drillers there. Stelle continued, “Governor Wolf should be honest about the taxes the natural gas industry is paying. Making Pennsylvania even less economically viable for the natural gas industry is a real danger. West Virginia, the model for Wolf’s severance tax, has seen rig counts decrease.”

Pennsylvania Taxes and Fees Currently Paid by Natural Gas Drillers

Road Repairs: $500 million
Sales, Corporate and Personal Income Taxes: Over $2 billion
Impact Fee: more than $400 million

“Announcing this tax in a county which has no active natural gas wells speaks to his tone-deaf, one-sided view of the issue,” continued Stelle. “Further, Wolf completely ignores the fact that low-income families in the southeast will see their heating and cooling bills rise as a result of this tax.”

“As an MIT graduate and student of economics, Gov. Wolf should realize Pennsylvania is already losing in the competition for energy jobs,” Stelle remarked. “Piling on a severance tax will only drive jobs and tax dollars away from Pennsylvania. Students hoping for economic opportunities in their home state deserve better.”

Elizabeth Stelle is available for comment today. Please contact us at 717-671-1901 schedule an interview.

Best,

Cindy

Cindy Hamill
Dir. of Strategic Communications
Commonwealth Foundation
Harrisburg | King of Prussia
Office: 717-671-1901
[email protected]
Commonwealthfoundation.org