Use caution with Wolf’s gas tax proposal
In his relentless push for a natural gas severance tax, Gov. Tom Wolf has gotten much better at the practical side of the initiative.
His latest rendition, outlined at a public meeting hosted by the state Department of Environmental Protection’s regional director recently, calls for establishment of a $4.5 billion, four-year initiative through the severance tax.
The funds would be used to benefit high-speed Internet access, disaster recovery, downstream manufacturing, business development and energy infrastructure, along with demolition, revitalization and renewal and transportation capital projects.
DEP Regional Director Marcus Kohl emphasized that the aim of the funding is particularly toward flood-restoration projects and maintenance of streams, a sweet spot in our flood-prone area.
It’s a practical play for a severance tax by the administration.
But what happens at the end of the four years? Where does the money go after that?
And if these initiatives make so much sense — and they do — why aren’t they in an existing budget or capital projects plan?
Given that state spending has risen 40 percent over the past 15 years, we don’t want to hear the money is not currently there.
So the tax tug-of-war remains over the natural gas industry, one of Pennsylvania’s major economic drivers.
The gas impact fee, which has brought $73 million to Lycoming County and its municipalities in the past decade for a variety of infrastructure and other projects, remains one of the most practical initiatives passed in this century in Pennsylvania.
A double-tax, while worth consideration given the health of the natural gas industry, comes with great trepidation. Is it really worth it if leaders of the highly competitive industry vacate the state, costing Pennsylvania jobs, leading to higher consumer prices and removing one of the state’s most valuable exports?
That’s a lot of sacrifice to get more money in the state’s coffers when there probably already is enough there to engineer the four-year initiative proposed by the governor.
Regulate the industry strictly? By all means, do so. And we think that mechanism is already in place.
Double-tax them? Be careful of the fallout that comes with a questionable return.