Flawed Analysis by (Gasp) the EIA on Severance Taxes
Our favorite government agency, the U.S. Energy Information Administration (EIA), published an article on Friday that appears to “take sides” in the Pennsylvania debate over whether or not to institute a severance tax. Which is a disappointment. Until now the EIA has stayed above the fray in such issues. The EIA article from Friday offers a grossly misleading side-by-side comparison of where states get their primary source of revenue to feed their voracious appetites to transfer wealth from those who earn it to those who don’t–and how much is contributed by oil & gas severance taxes. The EIA compares tax revenues from five major fossil fuel generating states–Alaska, North Dakota, Wyoming, Texas and Pennsylvania. The graphic they use is powerful (and misleading) and appears to support calls to increase a severance tax in Pennsylvania. We disagree–strongly–with that position. Here is the EIA post from Friday, followed by MDN’s explanation of how it is grossly flawed…
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Two Republican members of the Pennsylvania House of Representatives have penned a column that points out the math for PA Gov. Tom Wolf’s so-called severance tax on the Marcellus Shale industry a) doesn’t add up, and b) doesn’t actually end up funding education. What makes the column noteworthy is that the two Republicans are not the conservative leaders of the PA House, but instead are from the Philadelphia area. Every Republican we’ve seen from the Philly area are moderate at best–usually RINOs (Republican in Name Only)–and certainly not anywhere near conservative. Yet these two, Rep. Tom Quigley from the 146th district in Montgomery County, and Rep. Warren Kampf from the 157th district in parts of Montgomery and Chester counties, ever-so-eloquently skewer Wolf and his inane high tax plan. Remarkable, coming from two Philly-area Republicans…
Where does the Pennsylvania budget negotiation/standoff stand? Depends on who you ask. There have been some intense negotiations over the past few days (a room with a bunch of men hollering at each other). When he emerges from the meetings, PA Gov. Tom Wolf, the most liberal governor in the United States, paints a smile on his face and mouths unspecific platitudes about making progress. When Wolf’s top surrogate emerges, State Sen. Vincent Hughes (Democrat from Philadelphia), Hughes says they aren’t any closer to getting Republicans to cave on a Marcellus Shale-killing severance tax. And that irks him. And Hughes blusters that there will be NO budget without a severance tax as part of it. Good luck with that Sen. Hughes. We applaud Republicans for preserving the Marcellus industry–what’s left of it in this low price environment. Let’s hope Republicans don’t cave to the bluster and deceit being pedaled by the Democrats in Harrisburg. We certainly understand the Dems are in a real bind. They PROMISED the teachers unions big money in return for their support. This is a payoff–shaking down the Marcellus industry to give the money to overpaid teachers and union bosses. And if Wolf doesn’t pull it off–he can kiss a second term good-bye as far as the unions are concerned. They play for keeps and Wolf knows it. Here’s the latest in the ongoing budget battle…
In the midst of a political debate about whether or not to enact a severance tax comes another masterful one-two punch. First punch: the Democrat-controlled Pennsylvania Independent Fiscal Office (which is manifestly NOT “independent” but indeed is VERY dependent–on the Democrat Party) has issued an analysis that the world is ending for the impact fee assessed on Marcellus drillers. The IFO, spreading FUD (fear, uncertainty and doubt) says this year the impact fee is on track to raise the least amount of money it has raised since it’s introduction in 2012 (gasp!). How much less? Somewhere between $14 million and $33 million less (between 6-13% less). Why? Because drillers have slowed down and in some cases stopped drilling new wells due to low prices for natural gas. We note the IFO has never before, according to our recollection, issued such a forecast this early in the year. Why is that? Because the Dems need something/anything to try and bludgeon and bully Republicans into accepting the worst idea ever–taxing a single industry to transfer its wealth to another group of people who don’t earn any wealth on their own–teachers’ unions. Big Education only takes–they never give (except to transfer some of their taken money via union dues back the Democrat Party in a quid pro quo). The second punch then arrives right on cue, from a Democrat sycophantic news outlet publishes this breathless “news”…