Severance tax hearing generates heated response

Representatives from Pennsylvania;s Independent Fiscal Office (IFO) and the Pennsylvania Chamber of Business and Industry testified in response to Gov. Tom Wolf’s proposed natural gas industry tax during a joint Senate committee hearing in Harrisburg on Monday. 

Both entities responded strongly to the plan. 

While the Commonwealth boasts top teacher salaries, Chamber President Gene Barr said, “The strongest education system in the nation matters little if graduates do not have jobs waiting for them once they earn their diplomas."

Barr said increasing taxes on the natural gas industry could raise costs for residents and threaten the state’s economic competitiveness.

"The enactment of a severance tax will impede the significant progress Pennsylvania has made with respect to job creation and render the state even less competitive with that of other states," Barr said.

Citing the immense potential of the Marcellus shale industry, Barr also urged lawmakers to realize that Pennsylvania is “well-poised to benefit greatly from increased global demand” for its natural resources. He concluded by saying the Chamber’s position is that the proposed budget could hurt business.

The IFO, which provides revenue projections for use in the state budget process, discovered in its study of the proposed plan that Pennsylvania’s current impact fee creates a tax rate of less than 1 percent, while the governor’s proposal would levy 7.3 percent.

“The proposed severance tax will likely move Pennsylvania from one of the lowest severance tax states to the highest tax state, relative to other major gas producing states,” IFO Director Matthew Knittel testified. 

Organizations in this Story

Pennsylvania Chamber of Business and Industry

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