Taxation

Good news for Pennsylvanians. The PA legislature is moving forward with passing a budget bill that does not include a Marcellus-killing severance tax. The Gov. Tom Wolf administration has been obstinate and unyielding in their demand for a 17.3% severance tax (often mischaracterized by Wolf and the media as a “5%” severance tax). The Republicans in both the House and Senate have (amazingly) held firm in their position of no new severance tax since Marcellus drillers already pay an impact fee (i.e., a tax) equivalent to a 3.2% severance tax now. Wolf’s claim that his tax is 5% is a flat out, 100% lie. He bases the tax on the assumption that drillers will get $2.97 per thousand cubic feet when selling natural gas. In many places (especially the northeastern part of the state) drillers are getting less than half of that. The difference between what drillers actually get and what Wolf pretends they get, plus the “little extra” 4.7 cents per Mcf added to the “5%” tax, pushes the effective rate, according to the PA Independent Fiscal Office, to 17.3% (see PA Official Admits Wolf Severance Tax Highest in Nation @ 17.3%). Wolf’s chief budget negotiator, John Hanger, has stooped to a new low, even for him, by saying Republicans have put drillers ahead of PA’s school children. Hanger presumes the money EARNED by companies that risk their own capital somehow belongs to life’s TAKERS–teachers’ unions. The question now is, will Wolf sign the Republican budget that is about to land on his desk without the big increase in “education funding” he demands because he promised it to union members who voted him into office (i.e., political payola)…
Read More “PA Republicans Say No Severance Tax in Budget Heading to Gov. Wolf”

Once again the Pennsylvania impact fee–the equivalent of a state severance tax on all oil and gas drilling in the state–will bring in an enormous amount of revenue for the state: $223.5 million for calendar year 2014 to be exact. That’s down slightly from the $225.7 million levied in 2013. Yesterday the PA Public Utility Commission (PUC) released the official numbers, a day after state Republicans leaked a draft version of the report. Those rascally Republicans wanted to share the news that the impact fee is doing just fine, thank you very much, and we don’t need Democrat Gov. Tom Wolf’s Marcellus-killing severance tax of 17.3% just to feed the beast (teachers’ unions). Note that drillers are required to pay their impact fee/tax by April 1st. Last year the PUC, under then-Gov. Tom Corbett, released a preliminary report of monies raised and to be distributed on April 4th (see 2013 PA Impact Fee Sets Record: $224.5M, Grand Total Now $630M). This year the PUC, under Gov. Tom Wolf, still hadn’t released the report by early June. Why did the PUC hold back the report this year? It took Republicans leaking the details to force the hand of the PUC into releasing the official numbers. Was the PUC, under Wolf’s newly appointed chairperson Gladys M. Brown, sandbagging for political reasons–to influence the debate on the severance tax by withholding important information? You decide. Below we have a breakdown of the numbers for 2014–who’s getting how much–along with some pretty charts from the PUC…
Read More “PA 2014 Impact Fee Disbursement Info: Why Did PUC Delay?”

After being shamed into it by state Republicans, the Pennsylvania Public Utility Commission (PUC), after delaying it for two months, yesterday released the numbers for the 2014 impact fees–the equivalent of a severance tax on PA’s drillers. The total raised was $223.5 million, to be divvied up between those places where drilling takes place (receiving 60% of the fee) and other boondoggles cooked up by Harrisburg politicians (the other 40%). See today’s companion story on who gets what from the 2014 impact fee (PA 2014 Impact Fee Disbursements: Why Did PUC Delay?). This post concentrates on the drillers themselves and how much money each one contributed to the impact fee pot for 2014. Below are some helpful pie charts from the PUC (including the number of active wells in the most-drilled counties), followed by the entire list of who paid how much…
Read More “PA 2014 Impact Fee Payments: List of Drillers & What They Paid”

Pennsylvania Gov. Tom Wolf continues to face stiff opposition from the public at large, and (more importantly) from Republicans in the PA state legislature. The leadership of both the PA House and Senate have lined up against Wolf’s severance tax, which he claims is 5% but now everybody freely admits is really closer to 17% (see PA Official Admits Wolf Severance Tax Highest in Nation @ 17.3%). The PA budget is due by June 30. Negotiations between Gov. Wolf and the legislature continue. When the two sides meet, the temperature in the room noticeably drops. Wolf is in over his head and apparently doesn’t know it–or won’t admit it. He set an unrealistic expectation with teachers’ unions that he would pay them off for their support by taxing the #$#@ out of the Marcellus industry–transferring the hard-earned money of Marcellus producers to Big Education takers. PA Republicans in the state legislature are the firewall. Let’s hope the firewall holds…
Read More “PA Republicans Hold Firm in Opposing Wolf Severance Tax”

A mixed editorial by the Pittsburgh Post-Gazette on Pennsylvania Gov. Tom Wolf’s ill-dated severance tax plan. The Post-Gazette believes, like most liberal Democrats, that the gas in the ground belongs “to the state” and not to individual, private property landowners. In their minds, a piece of the action (i.e. tax) should be levied on the gas coming out of the ground to transfer that wealth away from the people who own it–landowners–and give it to teachers’ unions instead. It’s always “for the children,” of course. (Utter bunkum.) Anywho, the Post-Gazette, while loving things like severance taxes, has begrudgingly faced the music on Wolf’s plan. They now see the fatal flaws and (consequentially) admit them. Their aim with the editorial is to have Wolf “fix” his broken plan, which isn’t likely to happen. Wolf doesn’t think his plan is broken and his attitude, along with the smug attitude of his lieutenants like Dept. of Environmental Protection Secretary John Quigley, is that the Wolf severance tax plan is superior and needs no fixing. Reality is gradually starting to dawn on the Dems–that they’re not going to get a severance tax this high–and so the blame game has begun. The worm has started to turn…
Read More “The Worm Begins to Turn re Gov. Tom Wolf’s Severance Tax”

The head of Pennsylvania’s so-called Independent Fiscal Office (a partisan organization) testified before a joint hearing of the state Senate’s energy and finance committees yesterday and said (fantastically) non-Pennsylvanians will “eventually” pick up most of the tab for a nosebleed high severance tax proposed by PA Gov. Tom Wolf (Democrat). Matthew Knittel, head of the Independent Fiscal Office, also testified under oath that Wolf’s severance tax will have an initial effective rate of 17.3% in 2016–instantly skyrocketing to become the nation’s highest severance tax…
Read More “PA Official Admits Wolf Severance Tax Highest in Nation @ 17.3%”

Pennsylvania Gov. Tom Wolf has proposed a slew of new taxes as part of his proposed budget. Yes, there’s a 15% (or according to his own government advisers, 17.3%) severance tax in the package of tax increases Wolf wants. But there are a number of other taxes the PA Democrat governor, who took office in January, wants as well. When you add it all up, its over $12 billion in new economy-crushing taxes. So the Republicans running the PA House held a vote yesterday on the entire package of Wolf’s tax proposals. In other words, do you really want this? Is this the way to go? The vote was taken, and every single House member, all 193 of them–Republicans and Democrats–voted against Wolf’s tax proposals. Wolf called the vote a “stunt” and said, “This is the kind of gamesmanship that we were not sent here to play.” Er, did we miss something? YOU wanted all of these new taxes Gov. Wolf. So when YOUR taxes were voted on–all together in one package–you didn’t want it after all? Did you have a change of heart? Why did you propose those taxes if you didn’t want them voted on? This is the kind of gamesmanship we’ve come to expect from the Democrats in the Keystone State. The kind of political “stunts” they play. When the Democrats’ enormous appetite for taxing and spending is exposed and brought out into the open, they run away…
Read More “PA Gov Wolf Tax Package (Incl Severance Tax) Voted Down 193-0”