Gov. Wolf has proposed a severance tax on the extraction of natural gas in Pennsylvania to provide funding for public schools. Lawmakers in both parties have introduced severance tax bills every year since 2009, and every year the gas drillers have successfully fought the tax, spending $46.8 million on lobbying since 2007. Much of the industry’s lobbying money has gone into manufacturing a narrative, built on a foundation of myths, about the economic benefits of drilling and the fragility of the industry.
Gov. Wolf has proposed a severance tax on the extraction of natural gas in Pennsylvania to provide funding for public schools. Lawmakers in both parties have introduced severance tax bills every year since 2009, and every year the gas drillers have successfully fought the tax, spending $46.8 million on lobbying since 2007. Much of the industry’s lobbying money has gone into manufacturing a narrative, built on a foundation of myths, about the economic benefits of drilling and the fragility of the industry.
The Pennsylvania Budget and Policy Center has compiled five facts, supported by research and independent data, which tell the real story. We are posting a fact a day on this blog. Today, we give you:
Fact 2. Every other major gas-producing state has a severance tax, so there would be no point to a drilling company “leaving” Pennsylvania because a severance tax is enacted here. State tax policies make little difference in the development of resources in one state over another. Montana offered tax rates of about half that of neighboring North Dakota, yet from 2009 to 2012 production doubled in North Dakota and fell in Montana by 14%. Tax policy aside, Pennsylvania’s Marcellus/Utica shale play is the largest, lowest-cost gas producing region in the country so it is very attractive to drillers