Taxation

Since 2012, Pennsylvania has collected the equivalent of a severance tax from Marcellus Shale drillers via something called an impact fee. Same concept as a severance tax. You drill a well, gas comes out, you pay a tax. Except with an impact fee you pay whether or not anything comes out of the ground (a more reliable source of tax revenue than a severance tax). The impact fee quickly started to generate hundreds of millions of dollars a year in extra revenue for Pennsylvania–60% of which goes back to the communities where drilling happens (which Philadelphia politicians hate), and 40% of which goes to the black hole of Harrisburg for redistribution (which Philadelphia politicians love). Drilling began to slow in 2014, and crashed in 2015/2016, with low low commodity prices for natgas. As the price went down, so too did the number of new wells drilled. Impact fee revenue (which is delayed a year) also went down. The impact fee doled out this year is based on revenues raised in 2017. The PA Independent Fiscal Office (IFO) does a pretty good job of guesstimating how much impact fee revenue will be generated. Last July, the IFO predicted impact fee revenue from 2017 would end up being around $222 million in revenue (see IFO Predicts PA Impact Fees for 2017 Will Soar, Near Record High). Now that the year is in the can and production reports are rolling in, the IFO now predicts impact fee revenue will end up at $219.3 million. The all-time high for a single year’s impact fee revenue was 2013, when it was $225.7 million. Looks like 2017 will come within a whisker of that record. Meaning higher levels of new drilling is now “back” in the PA Marcellus…
Read More “PA IFO Says 2017 Impact Fee Revenue Near Record High”

Last September, amidst a heated state budget battle in Pennsylvania (where the phrase “severance tax” was on the lips of every Democrat and RINO in Harrisburg), a group of PA House Republicans did the hard work Gov. Tom Wolf and his cronies in the legislature refused to do: They figured out how to fund a wildly overspent budget without raising a single tax (see PA House Introduces Balanced Budget with NO Severance Tax). How did House Republicans do it? They went looking for state agencies hording money, with a plan to relieve them of their surplus. You know how it goes. Each year agencies don’t spend all of their allotted money, yet they ask for more the following year anyway, knowing legislators may shave some from the request. It’s obscene. Yet that’s how the game is played. When Republicans went looking, they found even the Dept. of Conservation and Natural Resources (DCNR) and Dept. of Environmental Protection (DEP) have been squirreling money away, unused in some of their programs. The House Republican plan from last September was not adopted, but elements of it were included in the final budget. The final budget passed in October instructs Gov. Wolf to reallocate $300 million from surpluses at various state agencies–from the agencies of his own choosing–as part of the “funding” for this year’s budget. The House Appropriations Committee will hold a meeting on Jan. 25 to question representatives from DCNR and DEP about the use and operation of special funds under their administration–to see if there’s a bit of surplus there that can be used for the state budget. Judging by the reaction from a former DEP Secretary, it seems both agencies take umbrage at having to subject themselves and their surpluses for scrutiny. At its core, this issue is about who will pay bloated teacher’s salaries in Philadelphia. Big Green wants to target the Marcellus industry to pay “for the children.” Yet when they themselves are asked to contribute a small amount of their bloated excess (give it up for the Philly teacher’s unions), THEY resist! They are all for raiding another industry, but refuse to have their own departments “raided” in order to balance a hugely overspent state budget. Anyone else smell rank hypocrisy?…
Read More “PA Enviros Resist Transferring Surplus to Help Balance State Budget”

Unstable people tend to create instability wherever they go–it’s just something we’ve noticed. Other people have noticed it too, at the highest levels of Pennsylvania state government. Business groups in PA are pointing a finger at unstable PA Gov. Tom Wolf. His repeated calls, his maniacal mission to force a severance tax on the Marcellus industry on top of the existing impact tax, is causing “instability” in the industry in PA. That is, companies are pulling back, not willing to drill as much, and investors are not willing to invest, because of the uncertainty of whether or not there will be a severance tax. It’s spooking the industry. These business groups, representing hundreds of thousands of PA residents, are calling on Wolf to end his unstable ways and quit calling for a severance tax. Specifically, they say, “He needs to stop it.” Is that blunt enough? Instead, these groups call on Wolf to reign in out-of-control spending. The less you spend, the less you need to rob from hardworking companies–companies providing tens of thousands of jobs and over a billion dollars of tax revenue for the state so far…
Read More “PA Gov. Wolf Creating “Instability” with Demand for Severance Tax”

A single vote saved the day on Tuesday, preventing the horrible Pennsylvania House Bill (HB) 1401 from potentially coming up for a full vote. We’ve covered this insane bill repeatedly because it is an existential threat to the Marcellus Shale industry in the Keystone State (see our stories here). State Rep. (and RINO) Todd Stephens, from Montgomery County, made a motion on the floor Tuesday evening to keep debating HB 1401 as a “Special Order of Business” after all the business was done for the day. Tuesday was the last day of the current session until late January next year. Stephens’ motion received 100 votes. It needed 101 to pass. What does it mean? At the earliest the bill won’t be considered again until Jan. 22. Practically speaking, since the bill has not been able to muster enough support to get a vote by the full House, it means the bill is now on life support–near death. Which is a VERY good thing for PA…
Read More “1 Vote Saves the Day – PA Severance Tax Vote Delayed to Next Year”

The lefty propagandists, who refer to themselves as “editors” of the Pittsburgh Post-Gazette, are at it again. Last Friday they ran an editorial calling out State Rep. Eli Evankovich, a Republican from Murrysville, saying he should be “ashamed of himself.” Why? Did he secretly use false personas of his own constituents to attack the oil and gas industry? No, that was State Rep. Jesse White, whom the Post-Gazette “editors” were strangely silent about (see PA Rep. White Says Fake IDs were “Error in Judgment”). Rep. Evankovich’s transgression is that he offered an amendment to the insane severance tax bill being considered in the PA House, HB 1401. Evankovich’s amendment would require natural gas utilities to add a line item in the gas bill consumers get in the mail each month. The line would have the names of the governor and the local representatives who voted for the severance tax, along with the portion of the gas bill that goes to pay for the tax. Heresy! Off with his head! You NEVER actually tell the hoi polloi, the common people, the truth! That’s just not done. And so the editors of the Post-Gazette want to shame (better yet vote out of office) Evankovich for daring to throw this disgusting tax–all of which will go to Philadelphia teachers to repay them for voting for Wolf–right back in their leftist faces. Unfortunately Evankovich’s amendment was voted down…
Read More “Post-Gazette Editors Show Total Ignorance re Severance Tax”

Did you know there is major news this week about the proposed Pennsylvania severance tax bill, House Bill (HB) 1401? No, you won’t read anything about what has happened with the bill this week, since the return of the PA House, in mainstream media. Why? Because mainstream media refuses to actually report news any more. They only pedal advocacy. HB 1401 continues to be blocked by courageous House Republicans, even though a variety of amendments have been raised and there was more floor debate on the bill–this week. The bill’s failure to garner a vote and the increasing likelihood it won’t, doesn’t fit mainstream media’s “this tax is inevitable” narrative. Go ahead–do a news search. Nothing in the Harrisburg Patriot-News (the “record” of what happens in the state legislature). Nothing in the Pittsburgh Post-Gazette, a reliable anti-drilling screed. Nothing in the Philadelphia Inquirer (is Andrew Maykuth on vacation?). And yet, there IS major news! The only source we could find to inform us of what’s happening is the leftist, Big Green former Secretary of the state Dept. of Environmental Protection, writing on a blog site. Our hat is off to David Hess for his willingness to do the job no one else will do, bringing us the blow by blow of what’s happening with HB 1401…
Read More “PA Severance Tax Bill Continues to be Blocked by Republicans”

We’re not sure when this happened, but the dreadful severance tax bill in the Pennsylvania House, House Bill (HB) 1401 went from being a 3.2% tax to now a 1.5% tax on Marcellus production. Even with the lower rate, as we pointed out in a post yesterday, liberal Democrats are already voicing disgust and laying blame in anticipation that the bill will not pass (see Ray of Hope in PA Severance Tax Debate: Lib Dems Attack M-U). We have yet more evidence along those lines. An editorial by John Baer, a lib Dem “columnist” for the Philadelphia Daily News says he smells something “fishy” about the current debate over HB 1401. Baer thinks the bill is going nowhere fast and is nothing more than a fundraiser, to get both sides of the debate charged up and flooding Harrisburg with big bucks to fund political campaigns…
Read More “How Low Will They Go? RINOs/Dems Decrease PA Sev Tax Bill to 1.5%”

MDN has closely followed the effort to pass a dreadful bill in Pennsylvania known as House Bill (HB) 1401, which would tack a 3.2% severance tax on top of the existing ~5% impact tax (called a “fee”) already levied on Marcellus drillers, thereby effectively killing any new Marcellus drilling in the state. Last week, just ahead of the Thanksgiving holiday, the House debated the bill for two days–then left town “abruptly” without taking any further action (see Update on PA Severance Tax Bill – More Progress, House Leaves Town). What happens now? Mainstream media is doing its best to put on a brave face that the bill is inevitable (see Final Push to Tax PA Drillers & Give Money to Philly Teachers). However, we’ve spotted more than one article in which the liberal Democrats who advocate for this bill are complaining about oil and gas “lobbying” being done in Harrisburg–blaming the big, bad Marcellus industry for continuing to block the bill. We take that as a very good sign–that the lib Dems are moaning and complaining. If they thought they had a prayer of a chance in passing 1401, they wouldn’t lash out in frustration as (for example) PA Rep. Vitali is now doing–lib Dem from the Philadelphia area. Nor would lib Dem newspapers like the Delaware County Daily Times run an “editorial” blaming Republicans playing politics for refusing to do what “everyone knows” should be done–pass a severance tax. These are a sure signs the lib Dems think they’ve lost and will not get the disastrous HB 1401 bill passed. Which makes us break out in a broad smile…
Read More “Ray of Hope in PA Severance Tax Debate: Lib Dems Attack M-U”

The tax-and-spend liberals in Pennsylvania and those who oppose fossil fuels (almost always one-and-the-same) are still pushing a dreadful, devastating severance tax bill proffered by RINOsaur (i.e. ancient RINO) State Rep. Gene DiGirolamo known as House Bill (HB) 1401. The bill, if passed into law, would tack a 3.2% severance tax on top of the existing ~5% impact tax (called a “fee”) already levied on Marcellus drillers, thereby effectively killing any new Marcellus drilling in the state (see PA Frankenstein House Bill Merges Severance Tax & Minimum Royalty). Last week, just ahead of the Thanksgiving holiday, the House debated the bill for two days–then left town “abruptly” without taking any further action (see Update on PA Severance Tax Bill – More Progress, House Leaves Town). What happens now? The House doesn’t return for voting work until next Monday, Dec. 4th. In the meantime, the bill’s lib supporters in mainstream media are trying to create the impression the bill will get adopted when the House returns from break…
Read More “Final Push to Tax PA Drillers & Give Money to Philly Teachers”