In the Philadelphia Inquirer earlier this week, Gov. Tom Wolf uses strong rhetoric about his desire for a large severance tax increase.
The governor responded by calling it “reprehensible” that the GOP had not agreed to impose a new tax on natural gas drillers, new money the governor wants to use for public schools.
Let’s be clear about a few things:
- Wolf’s severance tax isn’t dedicated to education, as Dennis Owens of ABC 27 points out. It is earmarked for corporate welfare for “alternative energy subsidies” among other things, but not for public schools.
Moreover, the vast majority of Wolf’s tax increase are via income and sales tax hikes. In other words, his plan would generate more money from taxing health care and day care than natural gas.
- Gas drillers are already taxed. They paid more than $800 million in impact fee taxes from 2011 to 2014 and $318 million in other state taxes since 2009. Drilling companies pay the same taxes as every other business in Pennsylvania.
- Our analysis of Wolf’s proposed severance tax finds it would result in 4,138 fewer private sector jobs in fiscal year 2017.
- Everyone—including poor and working class families—would pay more for a severance tax increase. The Independent Fiscal Office finds that households earning less than $100,000 will pay $180 million more annually in higher utility bills as a result of Gov. Wolf’s proposal.
Destroying jobs and making poor families pay higher energy bills—that’s what is truly reprehensible.