Governor Wolf’s economic recovery plan includes tax increase for natural gas industry

Pennsylvania

HARRISBURG, Pa. (WHTM) — Governor Tom Wolf laid out his plan to get Pennsylvanians back to work post-pandemic, but not everybody shares his vision. He laid out his Back to Work PA plan, a plan that would invest $3 billion into workforce development.

It would be funded by a severance tax in addition to an impact fee on the natural gas industry, a 2.8% combination, according to Wolf, which is expected to bring $300 million a year, over 20 years, equating to $3 billion in total.

“Shame on us if we don’t take advantage of it,” Governor Wolf said.

But Republicans say it’s a bad idea, and could actually hurt the Commonwealth’s economy.

“We don’t want the natural gas companies to be fleeing Pennsylvania, and cause our energy industry in the middle of winter to be suffering a crippling blow,” said Jason Gottesman, spokesperson for the Pennsylvania House Republican Caucus.

The money would go towards workforce redevelopment programs for better training, better wifi, more drive-thru career fairs and the like. According to the Governor, 75% of Pennsylvania’s natural gas is purchased outside of Pennsylvania, so the people paying this tax would mostly be those outside the Commonwealth. But UGI, a natural gas distribution company, said that’s not necessarily the case.

“About 90% of the natural gas that we distribute to customers is produced in Marcellus Shale, so we have a significant amount of natural gas that is produced and distributed right here in Pennsylvania,” said Joseph Swope, Manager of Media Relations for UGI.

He added that any increase in taxes would directly impact customers.

“I’m not sure there’s an alternative way to actually do the things we need to do to make the quality of life better,” Gov. Wolf said.

The Marcellus Shale Coalition president issued the following statement in response.

“Gov. Wolf and his team simply don’t get it. Pennsylvania already has a severance tax – it’s the impact fee, which has funded $2+ billion for community and environmental programs across the entire Commonwealth over the last several years. It was disappointing to hear the governor once again call for additional energy taxes that will harm consumers, local jobs, American energy production and the Commonwealth’s ability to recover from the pandemic,” president David Callahan said.

Callahan also pointed out potential flaws in the Governor’s quantitative evidence.

“His fuzzy math – citing a probably wrong tax rate of 2.8% – reflects the unseriousness of his proposal, which has been squarely rejected by leading business and manufacturing organizations as well as a broad chorus of bipartisan lawmakers,” Callahan said. “In truth, the governor’s proposal represents a combined energy tax rate of more than 12%, which would be the nation’s highest.”

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