I received this e-mail fro my state senator, Scott Wagner, today:

Dear Friend:

Below is an op-ed I wrote and sent to media across the state.  I thought it was important to share it directly with you as well. 

Sincerely,

Scott R. Wagner
Senator, 28th District, York County

Don’t Break Deals and Expect PA’s Economy to Grow

Governor Wolf and many legislators seem to think that a natural gas severance tax will solve Pennsylvania’s manufactured budget crisis.

There are several issues with the severance tax that need to be clarified.

Act 13 of 2012 imposed an impact fee on natural gas wells drilled in Pennsylvania.

To date, the impact fee has generated more than $1.2 billion in tax revenues. This unique model makes Pennsylvania the only state in the country that assesses a fee on unconventional natural gas development that goes directly to county and municipal governments instead of into the state’s general fund.

This model was designed to ensure that communities in 37TUall 67 counties directly benefit from Pennsylvania’s natural gas industryU37T and that those communities where development occurs are provided with appropriate resources to make necessary improvements to local infrastructure. More importantly, these communities do not have to rely on a year to year allocation from the General Assembly and the Governor.

When this law was passed, a provision was included (subsection 2318 of Act 13) to require that the impact fee expires upon the imposition of a severance tax. The General Assembly rightfully never intended double taxation on the industry.

However, this section of the law seems to be ignored by Governor Wolf, who continues to advocate for higher taxes on energy generated and used in the state.

Let me be clear: State government does not have a revenue problem, it has a spending and mismanagement problem. To make matters worse, Governor Wolf has not shown one ounce of initiative in holding dozens of state agencies accountable for their overspending. No one wants to explain what happened to over $800 million lost on a failed statewide radio network for the State Police. No one wants to explain where $400 million went within our state’s Department of Labor and Industry for a new computer system.

Folks, this is the tip of the iceberg.

If the severance tax is levied and the rules are changed from Act 13 so that Pennsylvania can impose both taxes, it will not take long for the natural gas industry to realize that they were shafted by this administration and move their drilling rigs to other states.

Pennsylvania already lost out on a $675 million investment by Braskem America for a petrochemical plant, which chose to invest in Texas instead of Delaware County due to delays and overregulation by the Pennsylvania Department of Environmental Protection.

Unfortunately, this bait and switch is nothing new to job creators looking at Pennsylvania for growth and expansion.

A few weeks ago, sales tax hikes were proposed on commercial storage facilities in Pennsylvania. At the same time, Governor Wolf courted Amazon to locate their second headquarters in Pennsylvania. Guess who would be hit hard by a sales tax on commercial storage? You got it – Amazon.

On one hand, we are asking job creators to come to Pennsylvania and grow their businesses here, create good-paying jobs, hire our residents and invest in our communities. On the other hand, Governor Wolf continues to throw new tax increases on the table that would completely contradict efforts to grow our economy.

Which way should we have it? Grow jobs or raise taxes? The choice is simple.

Shafting job creators and reneging on deals does not lead to economic prosperity -- it leads to more unemployed Pennsylvanians, loss of jobs and future growth.

The only winners if Pennsylvania raises taxes are other states, who will gladly poach our employers and proposed development due to our excessive tax-and-spend nature.


This was my response to him that I sent today:

Mr. Wagner:
Your e-mail of 10/19/2017 touting your op-ed to several newspapers concerning the budget and the proposed severance/extraction tax to be implemented on fracking operations in the Commonwealth of Pennsylvania. You express your opposition to this tax saying it will not help balance the budget. You also blame the governor for not reigning in spending. Quoting from your e-mail: “Let me be clear: State government does not have a revenue problem, it has a spending and mismanagement problem. To make matters worse, Governor Wolf has not shown one ounce of initiative in holding dozens of state agencies accountable for their overspending. No one wants to explain what happened to over $800 million lost on a failed statewide radio network for the State Police. No one wants to explain where $400 million went within our state’s Department of Labor and Industry for a new computer system.”

I must remind you that the governor’s office and department heads propose their budgets to the legislative branches of the commonwealth. It is solely the. Constitutional responsibility of the legislative branches of the government to approve, put into effect, and monitor those budgets. The actual responsibility for the administration of the state budget lies with the state senate and House.

I assume you are aware of the fact that 36 states have imposed severance/extraction taxes on gas and oil industries operating within their states. Pennsylvania remains the largest natural gas-producing state without a severance tax. At least 36 states impose some sort of severance tax, and 31 states specifically levy taxes on the extraction of oil and gas. In 2010, more than $11 billion was generated in the United States from severance taxes alone. Between 10.5 percent and 74.3 percent of total state tax revenue came from severance taxes in at least six states — Alaska, Montana, New Mexico, North Dakota, Oklahoma, and Wyoming.

Surely the citizens of Pennsylvania would benefit from this increased revenue source to repair infrastructure, lower or eliminate taxes on individuals, develop plans to attract and start up new businesses that will provide more jobs, lower education costs, and increase services that benefit all Pennsylvanians. That added revenue plus a higher level of scrutiny and management of the state budget by the responsible branch of the government (the legislature) would be beneficial for the state.

Instead of continually politicizing issues in an effort to bolster your campaign for governor in the next election, you and your colleagues should concentrate on diligently doing your jobs and searching for ways to make life better for all Pennsylvanians.