Natural Gas Tax Costs Jobs, Threatens Family Budgets

Fixing Pensions & School Funding Formula Better Solutions for Education

Good morning,

Today, Commonwealth Foundation Vice President of Policy Analysis Nathan Benefield will testify before the Senate Environmental Resources Energy Committee and Senate Finance Committee on the impact of Gov. Wolf’s proposed natural gas severance tax.

Benefield contends that despite the narrative pushed by the Wolf administration that gas driller’s aren’t paying their “fair share,” Pennsylvania drillers face one of the highest overall tax burdens in the country.

“Gas drillers have paid more than $600 million in impact fee taxes from 2011 to 2013,” Benefield said. “On top of this, gas drillers pay taxes common to every business operating in Pennsylvania, including the corporate income tax, personal income tax, and sales tax.”

Pennsylvania individuals and families have also benefited from $7.7 billion in gas royalty payments from 2007-2012. They stand to pay higher energy bills as a result of a new tax.

Benefield continued:

“The industry and related jobs in drilling communities aren’t the only ones who would be harmed. All Pennsylvanians would pay the burden of a new extraction tax. Today, Pennsylvanians benefit from drilling by way of cheaper energy prices. Low natural gas prices helped poor families with a $10 billion-per-year reduction in utility bills, according to a Mercator Energy analysis”

Benefield points out that families will be burdened by a new tax, “About $181 million of the severance tax cost would be borne by families earning less than $100,000, according to the IFO.”

Unfairly targeting the natural gas industry with additional taxation will also make Pennsylvania less attractive to industry investment, resulting in more than 4,000 fewer private sector jobs in fiscal year 2017.

Moreover, Benefield says Gov. Wolf’s insistence on new taxes to increase education funding is based on “myths and half-truths.”

“Pennsylvania’s education woes stem not from a lack of funding, but from a broken funding system and an ongoing pension crisis,” Benefield says. “That’s a problem new taxes simply cannot fix.”

Benefield’s complete prepared remarks are available here.

Nathan Benefield is available for comment today. Please contact me to schedule an interview.

Best,

John Bouder
Senior Communications Officer
Commonwealth Foundation
717-671-1901
[email protected]