Pennsylvania

We suspect that Pennsylvania Gov. Tom Wolf may suffer from OCD–obsessive compulsive disorder. What else could explain the fact that even though PA doesn’t have a completed 2015 budget, he’s about to introduce a 2016 budget that once again calls for a severance tax on oil and gas–when the industry in his state has gone nearly dormant because of low prices? Shale drillers are struggling to stay solvent and to keep drilling at least a few new wells. And Wolf is, once again, insisting on a severance tax, that will essentially stop all drilling. Perhaps a better word for it is pathological…
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There’s been a lot of talk over the past 5+ years in Pennsylvania that the state needs a severance tax. We’ve heard the repeated drumbeat that “eeeevvvvery other oil and gas state has a severance tax and we need one too.” A severance tax would, according to sticky finger Democrats and teachers unions, instantly solve funding shortfalls for education. Bam–solved. It would also fund a variety of “worthy” programs that the beneficent politicians in Harrisburg salivate to fund. A severance tax might even be the cure for cancer–who knows? Just one teeny, tiny problem. With the collapse of prices for oil and gas, and the resulting collapse in drilling, all of those “other states” with a severance tax are now scrambling to make up the difference in the shortfall they face in their own budgets. Turns out a severance tax isn’t a panacea after all. It also turns out an impact fee (PA’s equivalent of a severance tax), while sure to go down, will go down a lot less than a severance tax would. To our PA friends: Are you still happy you traded Tom Corbett, who was smart enough to create the impact fee, for the inept Tom Wolf who’s chasing a St. Elmo’s Fire severance tax? Here’s a look at the rapid fall of severance taxes in key oil and gas states in 2015, by the experts at the U.S. Energy Information Administration…
Read More “Severance Tax Not a Panacea After All – Down 50%+ in 2015”

At least one Republican, Pennsylvania State Rep. Jim Christiana (from Beaver County, PA), is pushing a new severance tax plan he considers kinder and gentler than that proposed by PA Gov. Tom Wolf. Christiana has proposed a tax with a rate of “just” 3%, instead of Wolf’s demand of 5% (see Some PA Republicans Beginning to Cave on Severance Tax). However, Christiana’s tax plan would, in time, increase to 5%–just like Wolf’s. Of course all of these numbers are hocus pocus horse manure. The actual percentage goes much higher when you factor in all of the extras. What’s interesting to us is how Democrat-controlled media organizations like the Scranton Times-Tribune (and its subsidiary the Wilkes-Barre Citizens’ Voice) are attempting to spin this news. They published an article referring to Christiana as a “conservative” trying to imply conservatives are now on board with a severance tax on drilling in the Keystone State. Let us assure you, such is not the case. It is another sterling example of media bias and spin…
Read More “Dem Media Spins New PA Severance Tax Proposal as “Conservative””