Resist temptation to make gas industry the budget solution
too many projected expenses, not enough revenue to cover them, and some long-term problems to solve in the process. That’s not new news.
Neither is the fact that tax increases and new taxes are being discussed to solve the problem.
That’s always the easier route than actually discussing spending priorities.
This time around, the convenient recipient for the road more easily traveled may be big oil and gas. Lawmakers are discussing a severance tax on gas companies to bolster the state’s revenue profile. The reasoning is that other states do it, so why not Pennsylvania?
Well, how about the concept of Pennsylvania being business-friendly for a change.
The companies already pay impact fees that bring direct dollars that have benefitted Lycoming County in a myriad of ways, from infrastructure improvements and restoration to local government projects. That money is, for the most part, coming directly to localities rather than being swallowed up in the state’s General Fund.
Pennsylvania is in competition with Ohio, West Virginia and several states to the west for the gas industry’s presence.
Several of the companies have warned the state’s leaders that they will consider pulling up stakes if the severance tax is added to the impact fees. These companies have several options and don’t have to be in Pennsylvania if there is a better deal elsewhere.
In return for their presence, the state’s economic and jobs profile has benefitted richly. Even the industry’s critics would admit there have been economic benefits to their presence if they have any rational bones in their bodies. What good is a severance tax if the companies relocate?
The state’s leaders need to choose mature reasoning over the usual tax, tax, tax method for solving their budget problems.
Instead of just throwing another tax on the companies, reject that idea and use it as a tool to reinvigorate the industry in Pennsylvania. Generate the revenues the old-fashioned way, through employment and the economic churn that comes with it, as well as the impact fees.
Hold the gas industry’s feet to the fire on environmental safety in the drilling and processing of the resource, but show that Pennsylvania is their best choice. We know, it doesn’t make for catchy sound bites built around a tight state budget in an election year. But it is the wiser course.