Taxation

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    PA Dems Continue to Push Severance Tax Instead of Spending Cuts

    Pennsylvania does not have a taxing problem, as people like Gov. Tom Wolf pretend–it has a spending problem, as in they spend beyond their means. The last governor that tried to correct that problem–Tom Corbett–got handed one term in the big chair for his efforts at dealing honestly with it. Big Education and Big Labor knifed Corbett in the back, politically, after he cut the mammoth increase in their growth. (FEED ME FEED ME) If you want to know why PA is in budget trouble, look no further than it’s Secretary of the Dept. of Community and Economic Development, Dennis Davin. Every econ growth guy we’ve ever talked to knows that increasing taxes gets less of what you tax–it is an incontrovertible fact in economics. Yet Davin, who’s boss is utter failure Tom Wolf, is pushing hard for a huge tax increase on the Marcellus industry–the very industry that has singlehandedly kept PA out of an economic abyss. And yet the guy who should understand the issue the best, is pushing hardest for the tax. That tells you all you need to know about the Wolf Administration and it’s utter failure…
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    PA DCED Sec Davin Visits Shell Cracker Site, Pushes Severance Tax

    Dennis Davin

    Dennis Davin, Secretary of the Pennsylvania Department of Community and Economic Development (DCED) took a field trip to visit the Shell ethane cracker site in Beaver County, PA last Friday. Davin was there to do some justified bragging about the facility and what it will mean for the Keystone State over the next 10 years. However, Davin was also there to push for a disastrous severance tax plan. Davin is a smart and competent guy. But he’s also a Democrat and his boss, Gov. Tom Wolf, sends Davin out to try and sell what can’t be sold: a severance tax that would literally kill the Marcellus Shale, the very thing making the Shell cracker plant a reality. Talk about conflicted! But Davin was there to do his master’s bidding, and that he did…
    Read More “PA DCED Sec Davin Visits Shell Cracker Site, Pushes Severance Tax”

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    RINOsaurs Enlist Help from Big Oil to Push Insane Carbon Tax

    A group of creaking, tottering old RINO (Republican in Name Only) dinosaurs (i.e. RINOsaurs) left the golf course long enough to lobby President Trump on the insane idea of a so-called “carbon tax” back in February (see RINOsaurs Lobby Trump to Enact Socialist “Carbon Tax”). Two of them were from the Ronald Reagan Administration–George Shultz and James Baker III, both former Secretaries of State. A carbon tax is nothing more than a way to slap a regressive tax on every citizen of the country–as if we aren’t already taxed enough. If you live in the great middle class of this country, you already pay close to 50% of your income in various federal, state, local, property, sales and other taxes. Add it up sometime, you’ll see we’re not exaggerating. A group of Republican “elder statesmen” (as fake news source CNN calls them) met with Team Trump at the White House to push this disastrous plan, calling it (be careful not to vomit), “conservative.” There’s nothing conservative about it. We thought perhaps that was the end of it, and the the RINOsaurs lumbered back to the golf course. Unfortunately, that’s not the case. Somehow the old farts have now enlisted the help of some Big Oil companies, including Exxon Mobil and BP, to help push a carbon tax in the U.S. We have little doubt Trump will go for it (he’s not stupid, like establishment swamp dwellers around DC). However, we find it troubling that people in our industry are buying into the hype around man-made global warming, and see a tax as the potential fix…
    Read More “RINOsaurs Enlist Help from Big Oil to Push Insane Carbon Tax”

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    Past PA Biz Roundtable Pres. Wants Severance Tax to Build More Pipes

    As the Pennsylvania budget deadline looms (June 30th), the Democrats and RINO Republicans are out in full force pushing, like a broken record, the dead issue of a severance tax. For the next nine days (or more, if the budget doesn’t pass on time, which is likely), we will have to hear about the Grand Canyon budget gap that exists, and how only soaking drillers (and landowners) to use THEIR money, will fix it. Johnny one tune. Every argument we’ve read always says money from a severance tax is needed to help fund the general budget. So when we spotted an opinion column that argued for the severance tax so the state can use the money to build more pipelines to areas without pipelines, so more residents can use natural gas, we thought that was kind of unique and funny. No, building more pipelines is not a good reason to impose a severance tax. It’s nothing more than yet another way to try and get one passed, and once in place, change the things it funds. In other words, it’s a lie. This particular view was offered by the former president of the Pennsylvania Business Roundtable. He’s also someone who’s “spent four decades in and around state government.” In other words, a swamp dweller. And establishment insider–the establishment in this case located in Harrisburg. So we’re not surprised that he wants a Marcellus-killing tax. It’s just dressed up in pretty platitudes…
    Read More “Past PA Biz Roundtable Pres. Wants Severance Tax to Build More Pipes”

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    Showdown: Comparing PA Impact Fee to WV Severance Tax

    Yesterday the Pennsylvania Public Utility Commission (PUC), the agency charged with keeping tabs on impact fee revenue from shale drillers (PA’s version of a severance tax), released the final numbers for impact fee revenues and disbursements in 2016 (see PA PUC Impact Fee Report: Revenue Down Again in 2016). Revenues were from the impact fee were down for the third straight year. And since politicians in Harrisburg are in the midst of budget negotiations and attempting to close a perennial gap in the budget, we have no doubt the hew and cry will go out, yet again, to enact a severance tax on shale gas and oil–either in addition to or on top of the impact fee. We’ve written about PA Gov. Wolf’s (and his fellow Democrats’) manifestly dumb idea of implementing a severance tax (see our numerous stories on the topic here). The new argument that will be used in Harrisburg is this: If we only had a severance tax, we wouldn’t experience as much of a decrease in revenue as we have with an impact fee. This post aims to debunk that claim. In fact, an impact is far superior to a severance tax (the tax “everyone has but us here in PA”). Why so? Because, as the numbers below show, PA’s decrease in revenue from an impact fee has been far less than the drop in severance taxes in other states, like West Virginia…
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    PA PUC Impact Fee Report: Revenue Down Again in 2016

    Each June, the Pennsylvania Public Utility Commission (PUC), the agency charged with keeping tabs on impact fee revenue from shale drillers (PA’s version of a severance tax) releases the final numbers of impact fee revenues and disbursements. Today is the appointed day for 2016 impact fees. The PUC reports impact fees on natural gas producers in 2016 totaled $173,258,900–the lowest annual revenue generated from the fee to date (since the fee began in 2011). However, 2016 was the low point for drillers drilling new wells–the bottom of the valley in the oil and gas industry. Since mid-2016 we’ve been on an upswing in drilling new wells, which will no doubt be reflected in 2017 impact fee revenues. We have the PUC press release below, and screenshots for many of the pretty color pie charts showing topline numbers. What was the #1 county receiving impact fee revenue (meaning the #1 county drilled) in 2016? Washington County. The driller paying the most in impact fees in 2016? Range Resources. The municipality receiving the most revenue from impact fees? Interestingly, that would be Cummings Township–in Lycoming County. Here’s the 411 on impact fees (i.e. taxes) raised and spent in PA for 2016…
    Read More “PA PUC Impact Fee Report: Revenue Down Again in 2016”

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    Group Forms to Shill for High Electric Prices from PA Nuke Plant

    Exelon Corporation, the company that operates the Three Mile Island nuclear power plant near Harrisburg (yes, THAT infamous TMI), is accomplishing what it set out to do. Nuclear power simply can’t compete against low-cost, abundant, clean-burning natural gas. And it’s losing. Just like coal did. But nuke plants produce a lot of electricity. And until the past few years, they’ve been quite profitable for the companies that own them. Not any more. So what do those companies, like Exelon, do? Ask the government to stack the deck, of course! Exelon recently announced they will close TMI in the next year or two–unless Pennsylvania behaves like socialist New York and Illinois to prop up the money-losing plant with subsidies. We wrote about this issue recently (see Nuke the Nukes: Harrisburg Battle to Prop Up Failing Nuke Energy). TMI is now the poster child. “Give us money, or we’ll shut ‘er down.” And with the threat of a shutdown, Exelon has enlisted local and state politicians to “sound the alarm” (i.e. shill) in order to “save jobs” and “save our communities” by injecting taxpayer and ratepayer money into these failing power plants… Read More “Group Forms to Shill for High Electric Prices from PA Nuke Plant”

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    Three Cheers! Trump Pulls U.S. Out of Horrible Paris Climate Treaty

    We wonder how many people actually watched President Trump’s address yesterday, announcing his decision to pull out of the horrible (and so-called) Paris climate treaty? Did *you* watch it? Or did you rely on the non-stop “hate Trump” mainstream media tirade that reported, endlessly, that we’re now all fried and the future of Mom Earth is over. What…utter…garbage. If you listened to President Trump, as we did, you would have learned that if we had stayed in this VERY bad deal, the United States would have been punished economically–transferring billions of our taxpayer dollars to other countries for generations to come. All in the name of supposedly stopping global warming. China and India would get to add as many coal-fired electric plants as they want–while we would have to close ours down, essentially shifting our jobs to other countries. The deal was bad from the beginning. Even if we had stayed in and even if all countries lived up to their obligations under the treaty, the projected difference in lowering global temps by 2100 would have been 0.17 Celsius–little more than one-tenth of a degree. After spending hundreds of billions of dollars. THIS PLAN WAS INSANE from the start. But you won’t learn that from mainstream media. We’ve found a few responses to Trump pulling out of Paris, from people who DO believe in global warming, but have the guts to tell the truth about the disastrous Paris deal and why it’s a GOOD THING Trump pulled out of it…
    Read More “Three Cheers! Trump Pulls U.S. Out of Horrible Paris Climate Treaty”

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    6 Towns, 3 Schools in Jefferson Co., OH Split $5M/Yr in Pipe Tax

    Click for larger version

    With all of the negative talk about pipelines and opposition to pipelines and pipelines will kill ya and pipelines are from the devil, you may have overlooked the fact that some areas bow down and kiss the ground and thank their lucky stars to have a pipeline. One of those places is Jefferson County, OH. Six townships and three school districts in Jefferson County will be part of taxing districts to share in $5 million a year in public utility taxes paid by the Texas Eastern Transmission pipeline (TETCo), a major interstate pipeline system. This is newfound money that school districts and towns are starved for in this era of budget cuts. And the money doesn’t come out of taxpayers’ pockets. It comes from private industry–from a pipeline flowing clean-burning natural gas. In a situation not unlike Warren Beatty giving Faye Dunaway the wrong envelope, TETCo gave the wrong information to the Ohio Department of Taxation about which taxing districts the pipeline passes through. So some schools and towns that were initially elated and now deflated, and others have hit the lottery. Frankly, it’s too bad the pipeline doesn’t go through all of them!… Read More “6 Towns, 3 Schools in Jefferson Co., OH Split $5M/Yr in Pipe Tax”

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    Tiresome: Philly RINO Rep Gene DiGirolamo Intros Severance Tax Again

    Rep. Gene DiGirolamo

    Pennsylvania State Rep. Gene DiGirolamo, a Republican-in-Name-Only (RINO) from the Philadelphia area, has been trying to punish the Marcellus industry in the state since 2011 when he first introduced legislation to impose a Marcellus-killing severance tax. And pretty much every year since then he has re-introduced a severance tax bill. Sometimes it’s for 3.2%. Other times 4.9% (see our DiGirolamo stories here). It appears he just plucks a number out the air and goes with it. DiGirolamo is back with yet another such plan. He has just introduced House Bill (HB) 1401, which would slap a 3.2% severance tax on all shale gas production. The socialist CLEAR Coalition–which advocates theft of other people’s money to fund their favorite “public” causes–held a rally to support the thefty HB 1401. RINO DiGirolamo showed up, the only “Republican” to do so. All of the other officials present were liberal Democrats. What does that tell you about this bill and its sponsor?… Read More “Tiresome: Philly RINO Rep Gene DiGirolamo Intros Severance Tax Again”

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    IOGAWV Opposed to Tiered Severance Tax – Proposal Now Dead?

    The West Virginia legislature only meets for 60 calendar days each year and move quickly when the do meet. Unless the governor calls for a special session. Which has happened–to consider and pass a budget for the state. During the regular session earlier this year, newly-minted Gov. Jim Justice wanted and got a bill, Senate Bill (SB) 415 (full copy below) that tiers the severance tax on natural gas and oil. Justice would keep the existing 5% severance tax on oil and gas as the bottom tier–to be assessed if the “annualized gross value of natural gas per MCF” is $3 or lower. When the annualized value goes to $3.01, the tax goes to 5.5%. At $3.51, it goes to 6%. And so on to $9/Mcf when the tax would be 10%. It’s a crazy idea and frankly, we’re surprised a Republican governor that supports the shale industry wants it. Other o&g states are looking at lowering their severance taxes, not raising them. At any rate, the Independent Oil & Gas Association of West Virginia (IOGAWV) is strongly opposed to the plan. From what we can tell, as of a few days ago, the tiered severance tax for natural gas/oil plan has been withdrawn. Which is good news for both drillers and landowners…
    Read More “IOGAWV Opposed to Tiered Severance Tax – Proposal Now Dead?”

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    PA Democrats Spout Lame Reasons to Support Severance Tax @ Hearing

    It seems no matter how many times we calmly, rationally, factually respond to and refute the intellectual dishonesty around the issue of a severance tax in Pennsylvania, PA Democrats pop up to make the same already-refuted, debunked lies they spew, again and again. They must be of the opinion that if you repeat the same lies long enough, people will begin to believe them. And so a group of elected (and appointed) Democrat “leaders” gathered in Wilkes-Barre yesterday to rehash and repeat the same tired old lies about a severance tax. The organizer of the event was State Rep. Eddie Day Pashinski (Democrat from Wilkes-Barre) who stated at the event he doesn’t think the gas companies pay “their fair share.” That is such a bogus statement in so many ways. When did privately earned money suddenly belong to the state in the first place? Does Rep. Pashinski know that drillers already pay a severance tax–called an impact fee? And that by passing a severance tax on top of an impact fee, PA vaults to the top of the list–it would have the highest taxation of the industry in the United States at an effective rate of 9% (see PA Independent Fiscal Office: Wolf Severance Tax Highest in U.S.). There is NO doubt that drillers would shut down their programs in PA if such a tax were passed. But perhaps that’s what Rep. Pashinksi wants? Also at the meeting was a Democrat who is usually reasonable–Dennis Davin, secretary of the state Department of Community and Economic Development. Davin and his crew have done good work for the state, but unfortunately he answers to Gov. Tom Wolf (worst PA governor in living memory), and Wolf forces Davin to attend these types of meetings to wave the flag for Wolf’s idiotic severance tax proposal. It must be demeaning for Davin. If Davin really believes what he says about Wolf’s severance tax–we guess he’s not as smart as we thought he was. Here’s how the fawning establishment press reported yesterday’s “tax the $%#! out of drillers” meeting in Wilkes-Barre…
    Read More “PA Democrats Spout Lame Reasons to Support Severance Tax @ Hearing”

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    Southwestern Energy Fighting Ohio County, WV Fire Dept. Fee

    Location of Ohio County, WV

    Ohio County, WV, like many rural counties, has a string of volunteer fire departments that respond to calls in their respective localities. When an industrial activity like shale drilling shows up, local volunteers need special (ongoing) training to address the unique circumstances involved with a well pad fire. There’s also all of the extra calls local fire departments get from the sheer volume of vehicle traffic related to workers coming and going, and trucks hauling all manner of materials–from pipes to equipment to water. Those vehicles sometimes get into accidents, requiring a fire truck to respond. So Ohio County passed a $5,000 per well pad fee, per year, to help defray those costs. Southwestern Energy is the only driller active in the county, currently, with some 29 well pads. For Southwestern, the fee equals $145,000 per year, year after year, going to the local fire department effort. When Ohio County sent Southwestern the bill, Southwestern didn’t pay it. Instead, they filed a lawsuit claiming the fee is “arbitrary and excessive”…
    Read More “Southwestern Energy Fighting Ohio County, WV Fire Dept. Fee”

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    New PA Bill an Overreaction to Court Ruling on Strippers

    As previously reported, liberal Pennsylvania House of Representatives Democrat Pam Synder has now introduced a bill (HB 1283, copy below) to “clear up” what the state Public Utility Commission (PUC) is a loophole in the Act 13 law that may allow some drillers to avoid paying impact fees (i.e. drilling taxes) on some Marcellus Shale wells (see PA Lib Dem Introducing Bill to “Fix” Strippers Once and for All). In 2012 Pennsylvania passed the Act 13 law that includes a fee on wells targeting shale layers, including the Marcellus. Snyder Brothers, headquartered in Kittanning, PA, drills mostly conventional (vertical only) wells in southwestern PA. In 2011-2012 they drilled 45 vertical-only wells, targeting the Marcellus–all of the wells fracked. Initially those wells produced more than 90 Mcf/day, but by December of the year they were drilled, they produced less than 90 Mcf/day. The way the 2012 Act 13 law is written, if a well produces less than 90 Mcf/day during “any” month it is considered a stripper well and exempt from paying the impact fee. The state’s Public Utility Commission (PUC) assessed the fee anyway because for 11 months the wells produced more than 90 Mcf/day. Snyder Bros. sued and after an appeal of the case, won their case in March, exempting those wells from paying impact fees (see PA Court Says Snyder Bros Wells are Strippers, No Impact Fees Due). That sent the state Public Utility Commission (PUC) into a tizzy. The PUC and the PA Democrat Party is using the court case to try and accomplish two things they haven’t been able to accomplish heretofore: (1) claim this is a prime example of why a nosebleed high severance tax is needed, in this year’s budget, and (2) fundamentally change the intent of the Act 13 law by passing a “clarification” as introduced by Snyder’s HB 1283 bill. Below we explore this issue in depth and tell you why the Snyder case win is NOT a way for drillers to avoid paying impact fees. In fact, the court’s decision makes it clear that drillers cannot simply reduce production for one month and then claim it’s a stripper well under the 90 Mcf/day definition. Snyder’s bill is an overreaction and does not clear up anything. Instead, it changes everything…
    Read More “New PA Bill an Overreaction to Court Ruling on Strippers”

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    OH Gov. Kasich’s Severance Tax Hike is Dead, Again

    As in previous years when Ohio’s RINO Gov. Kasich has proposed a super-high boost to the state’s severance tax, calm-headed Republicans (people from his own party!) have come to the rescue. Ohio House Republicans have removed Kasich’s boost in the severance tax rate from the budget. Meaning, it’s dead…
    Read More “OH Gov. Kasich’s Severance Tax Hike is Dead, Again”

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    PA Lib Dem Introducing Bill to “Fix” Strippers Once and for All

    Pam Snyder

    The kerfuffle over strippers in PA continues–stripper wells, that is. In brief, in 2012 Pennsylvania passed the Act 13 law that includes a fee on wells targeting shale layers, including the Marcellus. Snyder Brothers, headquartered in Kittanning, PA, drills mostly conventional (vertical only) wells in southwestern PA. In 2011-2012 they drilled 45 vertical-only wells, but targeting the Marcellus, all of the wells fracked. Initially those wells produced more than 90 Mcf/day, but by December of the year they were drilled, they produced less than 90 Mcf/day. The way the 2012 Act 13 law is written, if a well produces less than 90 Mcf/day during “any” month it is considered a stripper well and exempt from paying the impact fee. The state’s Public Utility Commission (PUC) assessed the fee anyway because for 11 months the wells produced more than 90 Mcf/day. Snyder Bros. sued and after an appeal of the case, Snyder Bros. won their case in March, exempting those wells from paying impact fees (see PA Court Says Snyder Bros Wells are Strippers, No Impact Fees Due). That sent the state Public Utility Commission (PUC) into a tizzy. The PUC, under liberal Democrat chairwoman Gladys Brown, is painting nightmare scenarios where impact fee revenue will be in jeopardy (see PA PUC Wants Act 13 Language Changed to Avoid Stripper Abuse). Brown wants the PA legislature to pass a new law amending the Act 13 law to “clear up” the language to say if a well produces more than 90 Mcf/day in ANY month, it qualifies to pay the impact fee. Brown has found a willing accomplice in PA State Rep. Pam Snyder, liberal Democrat representing Greene, Fayette, and Washington Counties. Snyder issued a press release to say she’s about to introduce a bill that Brown wants…
    Read More “PA Lib Dem Introducing Bill to “Fix” Strippers Once and for All”