Taxation

Is Pennsylvania Gov. Tom Wolf an extortionist? Or is he just dumb? Last week, in response to a reporter’s question about his proposed severance tax and what might happen if it doesn’t pass the legislature, Wolf said this: “You know, the alternative is not really no tax… the alternative is no drilling – a ban as in the case of New York” (see PA Gov Wolf Turns Bully, Threatens Ban on Drilling Absent New Tax). What the heck did he mean by that? And why are there NO mainstream media outlets covering it? Yesterday Wolf tried to walk back his comment without looking like a dolt. He didn’t succeed. The Pennsylvania Independent Oil and Gas Association (PIOGA) is fighting mad and says Wolf’s comment is tantamount to extortion (see their letter below). So which is it Gov. Wolf? Are you threatening the Marcellus industry in your state–pay the tax or die? Did you take one too many Xanax pills before the presser last week and you “misspoke”? What, precisely, did you mean by your comment?…
Read More “PA Gov Wolf Tries to Walk Back Ban Comment, PIOGA Doesn’t Buy It”

Newly elected Pennsylvania Gov. Tom Wolf has turned out to be another tax and spend liberal. Surprise! If you’re a regular MDN reader, you’re not surprised. We warned you about this from day one. Wolf released his severance tax plan yesterday, and it’s even worse than what he talked about on the campaign trail. He’s proposing a 5% severance tax PLUS another 4.7 cents per thousand cubic feet of natural gas that flows from a well. PA’s House Majority Leader Dave Reed (Republican) says it works out to be roughly a 7.5% tax–one of the HIGHEST IN THE NATION. On top of low low gas prices and rigs beginning to idle and capital budgets slashed 30-50%. In other words, if this tax is passed, not only will it not bring in Wolf’s disingenuous promise of $1 billion “for the children” (i.e. teachers unions), it will KILL Marcellus drilling in the state–and that’s not a bluff. It’s now apparent that Wolf is a man completely out of his depth and not ready for a big job like governor…
Read More “PA Gov Wolf Proposes Marcellus-Killing 7.5% Severance Tax”

Yesterday Pennsylvania Gov. Tom Wolf (Democrat) proposed what amounts to a 7.5% severance tax on Marcellus and Utica Shale drilling in the state (see our lead story today). Wolf’s severance tax is being erroneously reported as a 5% severance tax PLUS 4.7 cents per thousand cubic feet of natural gas produced at the wellhead. When you work it out, it’s actually about 7.5%, NOT 5% as Wolf misleadingly implies. Coupled with PA’s high corporate income tax rate, the proposal, if passed, would put PA at the top of the list of states taxing the oil and gas industry, essentially killing future Marcellus Shale drilling in the state (not an idle threat). Some of those most opposed to this hare-brained plan are the townships where drilling actually happens–they stand to loose big-time because the impact fee money they get now will be traded away for a few table scraps. The impact fee will be converted into the severance tax–and given away to Philadelphia…
Read More “PA Towns to Gov Wolf: Don’t Kill the Impact Fee with Your New Tax”

We seriously wonder if some of the legislators that serve in the Pennsylvania State Legislature are on drugs. Seriously. What else can explain comments like those from Pennsylvania State Senator Vincent Hughes (Democrat from Philadelphia) in saying the Marcellus Shale industry currently pays no taxes, that the drilling industry is making PA children “suffer,” and he thinks the industry should be hit with a new 8% severance tax PLUS another 1.9% impact fee. It’s absolutely mind-blowing–like psychedelic mind blowing. Does Hughes live in an alternate universe? Oh that’s right, he’s in the back pocket of teacher$’ union$ and is $imply their tool…
Read More “Philly State Senators Want to Slap Marcellus Industry with 9.9% Tax”

Here’s how tax-devouring Democrats and RINOs in Pennsylvania plan to pass a Marcellus-killing severance tax: Step 1: Keep the impact fee (which is really a tax) in place, which amounts to the revenue that a 2% 3.2% severance tax would raise. Never mind the state’s corporate income tax more than makes up the other 3% of a proposed 5% severance tax. The media, and politicians, intentionally ignore that inconvenient truth. [UPDATE: MDN has it from a highly-placed and trustworthy source that impact fees now being paid by drillers are actually closer to a 3.2% severance tax, not 2% as we previously noted.] Step 2: Introduce a severance tax bill of 3.2% severance tax bill, offered as a “compromise” that lets local communities keep their 60% of the impact fee, but steals money from landowners and drillers (the other 3.2%) to give to teachers’ unions, feeding the beast to keep it at bay (and to pay back a campaign debt). Step 3: After a year or two, when it’s apparent that Harrisburg’s continuing out-of-control spending hasn’t been reigned in and drilling slows down so there’s less tax revenue coming in, just goose the 3.2% tax all the way up to 5% or higher. That’s the plan of Reps. Gene DiGirolamo, R-Bensalem; Tom Murt, R-Hatboro; Harry Readshaw, D-Pittsburgh; and Pam DeLissio, D-Philadelphia as they introduce their “fair and reasonable” 3.2% severance tax bill…
Read More “PA High Tax Game Plan: Keep Impact Fee, Add Severance Tax To It!”

As newly enthroned PA Gov. Tom Wolf considers his misguided attempt at ramming through a Marcellus Shale-killing severance tax, he better talk to PA’s townships–all of which receive at least some money from the current impact fee. If the state suddenly yanks away impact fee revenue from those towns, many of which rely on that money in their annual budgets, Moody’s Investors Service says such an event will be “a credit negative” for those local governments. In other words, you can expect a Moody’s downgrade–making any bonds issued by PA towns more expensive, requiring more taxpayer money to pay back…
Read More “PA Towns Don’t Like Gov. Wolf’s Severance Tax Plan”

One of Pennsylvania’s top conservative (Republican) strategists and consultants, Charlie Gerow, offers up a sobering picture of the hard work ahead for liberal/leftist Gov.-Elect Tom Wolf when, on Wednesday, he assumes office and we drop the “-Elect” part in his title. Gerow points out that Wolf got elected by offering few specifics about his plans to raise taxes, except for a tax on the Marcellus Shale–he was crystal clear on that. When Wolf assumes office on Wednesday, all of his campaign prevaricating comes to an end and he will have to start offering real proposals for big problems. Gerow evaluates the prospects for a Wolf severance tax on Marcellus Shale gas this way:
Read More “Let’s Slap 5% Tax on ALL PA Natural Resources, Not Just Shale Gas”