Coalition to governor, General Assembly: Severance Tax will negatively impact Pa’s economy

The Pennsylvania Chamber of Business and Industry President Gene Barr and a panel of commonwealth business leaders sent a letter to Gov. Tom Wolf’s administration today reiterating their strong opposition to natural gas taxation.

One of the roadblocks in the ongoing Pennsylvania budget stalemate is Wolf's proposal of a 5 percent severance tax on the natural gas industry, plus 4.7 cents per thousand cubic feet of volume extracted. Republican lawmakers are balking at the tax. 

Following through on its earlier communication in May, the coalition of business leaders asked that the state's final budget not include a severance tax--stating that it is the wrong approach and would produce only a fraction of the proposed spending total; that the state’s natural gas industry has provided sustainable jobs, lowered utility bills and helped bring manufacturing back to the state; and that the current impact fee supports infrastructure improvements and critical services statewide.

“We are seeing a renaissance in southeast Pennsylvania, which has been dubbed the next energy hub of America,” the team said in the letter, noting that the state’s energy industry is seeing significant cutbacks in jobs and investment due to low prices of natural gas and claiming a severance tax would only exacerbate the reduction in investment, hurting tens of thousands of Pennsylvania families.

“New and expanded manufacturing facilities are being proposed across the state,” Barr and his colleagues wrote. “Natural gas is increasingly being used to heat and power homes. Trade labor has seen an increase in work thanks to the development of shale. Drilling activity has spurred the need for new home construction and created a host of opportunities all along the supply chain. But a severance tax jeopardizes all of this progress.” 

Urging the administration to respect their position, experience and expertise, the broad coalition stated, “In the end, this tax would needlessly crush jobs, cripple economic growth and wind up costing Pennsylvania more than it would get in return.”

The letter was co-signed by Dave Spigelmeyer, president of the Marcellus Shale Coalition, along with leaders in the forestry, construction, chemistry, automotive, manufacturing, energy and natural resource fields.

Click here to view the coalition letter. 

Organizations in this Story

Pennsylvania Chamber of Business and Industry

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