Taxation

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    Education Doing Just Fine Without Marcellus Tax in PA

    Guess what’s just happened? The fiscal year for Pennsylvania is in its last four months. Republicans held firm against an out-of-control-spending governor, Tom Wolf, with no increase in income taxes and no new Marcellus severance tax. And schools went on as they always do. Teachers taught, students learned. The educational Holocaust didn’t happen without hundreds of millions of dollars being transferred from Marcellus drillers to teachers unions. And everything is just fine. Illustrating that Wolf lied about the need for a new/high severance tax. But don’t worry, Democrats are consistent if anything. Wolf is absolutely insisting on a 6.5% severance tax this year, instead of the 5% severance tax he wanted last year. He’s doubling down on the tax, even though it was just proved it’s not needed…
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    PA RINO Rep. Kate Harper Trots Out Severance Tax, Again

    What is it about elected “Republicans” in the Philadelphia orbit? Seems to us most of them are Republicans in Name Only (RINOs). One such elected RINO, PA House of Representatives member Kate Harper, R-61, is once again floating a severance tax plan. Her 3.5% tax plan sounds better (on the surface) than Democrat Gov. Tom Wolf’s 6.5% plan–except she also wants to keep the impact fee and not allow that fee to be deducted from the 3.5% tax she wants to raise for the teachers’ unions. At least Wolf allows impact fees to be deducted from his plan. The point is, Harper is completely bonkers. Out of her mind. Read today’s companion story about rig counts and how PA has been decimated. And she wants to slap a tax on production?…
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    PA Auditor General Commits to Half-an-Audit of Shale Impact Fee $

    Coming soon to a Pennsylvania township near you: the jackbooted thugs from the office of the PA Auditor General, Eugene DePasquale. You may recall that since he assumed office, DePasquale has had a chip on his shoulder when it comes to the Marcellus Shale (see Newly Elected PA Auditor General Targets DEP First Day on Job). He put together a sham report on the DEP, calling attention to “problems” fixed years earlier, before he assumed office (see DEP to DePasquale: Problems Fixed Years Ago, Where Have You Been?). He couldn’t discredit the Marcellus industry via the DEP, so recently he started on a new track–the millions of dollars raised in a severance tax-like fee called the impact fee (see PA Auditor General to Investigate “Lost” $30M Marcellus Impact Fee). On Thursday DePasquale announced he will conduct a thorough anal exam, er, a, audit of all Act 13 impact fee money distributed to towns and municipalities. Just to be sure they aren’t blowing it on trips and new cars, but actually spending it as intended under the law. Ah, Mr. Auditor General sir? Some 60% of the impact fee revenue raised goes to local towns and municipalities where drilling occurs. The other 40% goes into the black hole of politicians’ sticky fingers in Harrisburg. Are you also going to audit the 40% that stays in Harrisburg and gets redistributed as political favors? If he doesn’t also audit the 40%, we’d call his audit “half-an-audit”…
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    Insanity: Ohio Dems Seek 7.5% Severance Tax in Severe Downturn

    Ever wonder why the Democrat refrain is always to raise taxes–never to cut spending. What is that? Perhaps they’re born with a “taxing” gene. The innocent-sounding but rabidly partisan group Policy Matters Ohio (founded by, led by, populated by, run by Dems) is once again making the case that because local governments get less revenue in this current downturn, with production in the Utica Shale continuing to expand, Ohio should tax the @#$% out of drillers by increasing the severance tax–as if the money earned by drillers/private businesses (at great risk and hard work) somehow belongs to politicians in Columbus with sticky fingers…
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    WV Gov. Tomblin Signs Severance Tax Cut into Law

    You may recall our amazement two weeks ago when we reported that West Virginia was on the cusp of passing a bill that will lower the state’s oil/natural gas and coal severance taxes (see WV Senate Passes Bill to Eliminate Part of State Severance Tax). In 2005 when now Gov. Earl Ray Tomblin was then President of the WV Senate, he presided over slapping a new/extra severance tax on oil, gas and coal–for the express purpose of paying down the state’s old workers’ compensation debts. At the time Tomblin promised when the debt was paid off, the tax would end. And by gaw he actually did it. Yesterday Tomblin signed the bill into law. A politician who keeps his word. Rarer than hen’s teeth…
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    PA Gov. Wolf Bans Leases on State Land & Busts DCNR Budget

    What happens when anti-drilling lib Dems, like PA Gov. Tom Wolf, get their way? Revenues dry up and the lib Dems have to raid other sources to make up for it. And that’s just what’s happening with the Pennsylvania Department of Conservation and Natural Resources (DCNR). Tom and the Dems made a big deal about not leasing nor allowing any more drilling on or under PA state lands. In fact, one of the first things Wolf did upon taking office in early 2015 was to slap a moratorium on any new state land drilling (see PA Gov Wolf Signs Exec Order to Ban Drilling Under State Land). What followed? No more lease payments for the DCNR, and royalties have fallen dramatically on land previously leased and drilled on/under. Now the DCNR faces a budget shortfall of $51 million–because of no new leases courtesy of Wolf. Wolf’s solution? Steal $61.3 million from the “general fund” to prop up DCNR. Typical…
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    John “Severance Tax” Hanger Quits Tom Wolf Administration – Why?

    One of the most left-wing partisans in Harrisburg, serving in the Tom Wolf Administration, is calling it quits. John Hanger, whom we once considered a reasonable man but who later proved he is not, is Wolf’s Secretary of Policy and Planning. Hanger has been one of the most shrill voices in Harrisburg in demanding a Marcellus-killing severance tax. Wolf is making a second ill-fated run at a severance tax and by all accounts Hanger was pushing it hard. And then he up and quit. Why? He says it’s because his wife and daughter live in Massachusetts (where she is vice-provost for faculty affairs at the University of Massachusetts Medical School.) To his credit, John has been married for 36 years to the same woman (she must be a saint!). However, we think he’s leaving for a different reason…
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    “Independent” Fiscal Office Says PA Impact Fee Revenue Drops 17%

    ifo logoThe Pennsylvania Public Utility Commission (PUC) is the organization charged with assessing and collecting the state’s impact fee on Marcellus drillers–PA’s equivalent of a severance tax. But that doesn’t stop the the extremely partisan, Democrat-controlled, so-called “Independent” Fiscal Office, or IFO from trying to steal the PUC’s thunder when it comes to announcing revenue from the impact fee. Each year the Dems at the IFO release their estimates for how much revenue will be collected for the impact fee months ahead of the PUC. The IFO doesn’t disappoint this year. Yesterday the IFO released their estimates for the fees to be collected from 2015 drilling (full report below), and the IFO estimates revenues will go down by $38 million over 2014 revenue–to $185.5 million. That’s a 17% decrease, even though the number of wells drilled in 2015 versus 2014 went down 43%. And that’s IF the IFO’s numbers are accurate, which is questionable given their extreme bias…
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    PA Newspaper Claims 25 House Repubicans Want Severance Tax

    The unofficial campaign staffer for PA Gov. Tom Wolf working at the Democrat-controlled Harrisburg Patriot-News is Candy Woodall. She calls herself a reporter but in reality she’s a propagandist. Woodall loves to bash the Marcellus industry. Her latest creative writing efforts (otherwise called “reporting”) is to say, essentially, “PA elected Republicans want a severance tax after all–they really wanted it last year, but they voted it down because they didn’t want higher income taxes. They really want to pass a tax on the Marcellus industry this year.” This is pure fiction/fantasy. Woodall claims there are 25 elected Republicans in the PA House who are ready to sign on to a severance tax proposal–yet she doesn’t list their names. Her main source appears to be Wolf’s policy secretary, John Hanger, who ran for governor on a platform of legalizing marijuana. In her latest fiction, Woodall and Hanger savage a truly great Pennsylvanian, House Speaker Mike Turzai, because of Turzai’s steadfast opposition to a tax that would assassinate the Marcellus industry. Woodall implies Turzai is in the pocket of the industry. Hey Candy–did you investigate whether pot growers donated money to Hanger’s campaign the way you “investigated” Marcellus drillers donating money to Turzai’s campaign? No, we didn’t think so…
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    WV Senate Passes Bill to Eliminate Part of State Severance Tax

    Politicians who keep promises? Consider us thunderstruck. It’s actually happened in West Virginia. In January MDN told you that WV Gov. Earl Ray Tomblin had proposed reducing the oil and gas severance tax (see WV Gov. Tomblin Proposes to LOWER Oil & Gas Severance Tax). Here’s the back story: In 2005, before he was Governor, Tomblin was President of the WV Senate. At that time the WV legislature passed an extra fee on top of the existing severance tax–a fee of 4.7 cents per thousand cubic feet of natural gas (along with a fee on coal extraction). The fee was to be used to pay down the state’s old workers’ compensation debts. Tomblin promised that once the debt was paid, the fee would be lifted. “Yeah, right” was the reaction. However, the debt is now nearly paid, and Tomblin has kept his promise. The WV Senate unanimously passed Senate Bill (SB) 419 that will lift the extra fee…
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    More on Wolf’s New 6.5% Severance Tax – What Could of Been

    A quick update on the new, higher severance tax being proposed by Pennsylvania Gov. Tom Wolf in his second budget (the first budget never passed and the state has survived on continuing budget resolutions). We reported yesterday that the new 6.5% severance tax would be “on top of” the existing impact fee. That may have left a wrong impression. Yes, the impact fee, which is already high, would remain. But drillers would be able to deduct the impact fee from the 6.5% severance tax, lowering the severance tax for them. It still works out to a 6.5% rate–ON TOP OF corporate income taxes these companies pay. Meaning Wolf’s new severance tax would be one of the highest in the country, if you include corporate income taxes paid by drillers (income taxes that don’t exist in other oil & gas states). In addition to more comment on Wolf’s proposed severance tax, we also have some inside scuttlebutt about the severance tax and what could have been had Wolf not blown it last year…
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    Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%

    straight jacketSomeone needs to bring out a straight jacket for PA Gov. Tom Wolf. He’s gone stark…raving…mad. He’s not only a danger to himself, he’s a danger to all of Pennsylvania. The only thing missing from yesterday’s budget address in Harrisburg was frothing at the mouth. In his mean-spirited budget address, Wolf insulted nearly everyone present–blaming everyone but himself for the budget disaster of last year. Wolf is either bipolar (off his meds) or just plain nuts. How else can you explain that after not passing his first budget because he demanded a 5% severance tax on drilling (which was really closer to 15%, see Pittsburgh Economic Leader Says Wolf Severance Tax Really 15% Rate), in the worst oil and gas downturn in 30 years, he’s just proposed a second budget with a 6.5% severance tax? It’s sheer madness…
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    Obama’s Final Disastrous Budget Targets Fossil Fuels

    In a final, parting shot at the fossil fuel industry, President Obama yesterday introduced what will be his final budget (thank God!). The plan calls for a new 25 cents per gallon tax on gasoline, cleverly disguised as a $10 per barrel “fee”–to be phased in over five years, long after Obama has retired to the links on some golf course in Hawaii. The fee would go to pay for the highway fund, and (of course) to fund Big Green projects (i.e. line the pockets of his supporters). The man knows no shame. The plan is clearly meant to force America away from using fossil fuels as an energy source, what the American Petroleum Institute calls Obama’s “leave it in the ground” strategy. The thing is, we don’t know of more than half a dozen Republicans on Capitol Hill (who happen to control Congress) who still possess their male equipment. Senate Majority Leader Mitch McConnell is the Emasculated-in-Chief himself. Will McConnell oppose this plan? Probably not. And that’s scary…
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    PA Republicans Commit Adultery with Severance Tax – Again

    What is it with Republicans in Pennsylvania? They’ve just won a major victory by not putting a bullet in the head of the Marcellus Shale industry, i.e. by not implementing Gov. Tom Wolf’s horrible idea of a severance tax. Major victory. But then they return to a severance tax like a cheating spouse who is serially unfaithful. Some Pennsylvania “Republicans” in the state legislature are once again committing adultery with a Marcellus-killing severance tax plan–the day before Wolf re-introduces such a losing plan for a second year in a row. The PA House Environmental Resources and Energy Committee held an informational meeting yesterday to consider two Republican-backed severance tax bills. One bill is being floated by Rep. Kate Harper, RINO-Montgomery County, the other by Rep. Scott Petri, RINO-Bucks County. Notice both RINOs are from the Philly vicinity, which is where most of the nonsense typically comes from. Even House Majority Leader David Reed, R-Indiana County, seems to be going squishy. His mouthpiece said, “It’s just prudent to kind of go through these bills and see what they do.” We disagree. The chairman of the House Environmental Resources and Energy Committee, Rep. John Maher, RINO-Allegheny County, is a sellout too, saying: “I think that there are many people who are open to the idea of a properly crafted severance tax.” With “Republicans” like these, who needs Democrats?…
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    Mountaineer XPress Pipeline Seeks Tax Break from WV Counties

    Columbia Pipeline Group is trying to convince counties in West Virginia where its proposed Mountaineer XPress Pipeline will be built, to reduce the amount of property tax they will have to pay under WV state law. Mountaineer XPress Project (MXP) includes 165 miles of new pipeline from Marshall County, WV to Wayne County, WV with approximately 2.7 billion cubic feet per day (Bcf/d) of transportation capacity from existing and future points of receipt along or near CPG’s system (see Columbia Pipeline’s Mountaineer XPress Project Accepted by FERC). In addition to new pipeline, the $2 billion project also includes constructing three new compressor stations and upgrading three existing stations. Columbia is shopping the concept of a PILOT–a Payment In Lieu Of Taxes. Such a plan essentially means they will pay less money than a county would otherwise collect in regular property taxes on the pipeline. Here’s the strange thing–the counties and school districts affected would end up keeping more of the money collected from PILOT payments than they would from regular property tax payments. It’s actually a win/win–Columbia pays less and more of the money paid stays local. Go figure…
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    EQT 20-Well Pad on the Way in Washington County, PA? Maybe!

    A recent meeting of the Nottingham Township (Washington County), PA Board of Supervisors proved to be a font of useful information about Marcellus drilling in the town, both past and future. Nottingham currently has three drilling sites, two of which are already active and one future. The two active sites have 11 and 12 wells either drilled or planned to be drilled. According to a local fractivist, the third site, which is planned by EQT, will have 20 wells on it. EQT says the eventual number of wells has not yet been determined (but they didn’t rule out 20 wells). Nottingham shares a border with Peters Township. Peters, you may recall, was one of the seven selfish townships that sued to overturn portions of the Act 13 law dealing with local zoning of oil and gas projects, eventually winning at the PA Supreme Court level (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). Nottingham has active drilling within its borders. Peters has still not allowed any drilling within its borders. Nottingham got $70,000 in impact fee money last year. Peters got $360,000 in impact fee money. What’s up with that?…
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