Governor Corbett Rethinks Pennsylvania Natural Gas Tax
Facing tough reelection odds, Pennsylvania Gov. Tom Corbett now natural gas tax, which he has opposed in the past, might be a good idea.
The natural gas industry in Pennsylvania grew by 72 percent from 2011 to 2012, making the state the fastest growing natural gas producer in the country. And more than 200,000 jobs in the state are directly or indirectly supported by the industry, according to the Pennsylvania Department of Labor.
Although a majority of Pennsylvanians favor a tax on drilling, and Pennsylvania is the only major gas-producing state without a severance tax, Gov. Corbett has been fervently opposed. It’s “un-American,” he’s argued, and would drive business and jobs to surrounding states, such as New York and Ohio, which also sit on the rich Marcellus Shale.
“Those are people that are back on the employment rolls,” Corbett said in a 2011 speech. “Those are people that, if they were on welfare, they can be off welfare now. That we won’t be spending state tax dollars on.”
More recently, Gov. Corbett has changed his tune. Once the industry has matured and most of the wells are drilled, it may be time to impose a tax, he told NPR affiliate StateImpact in an interview published Monday. But rather than tax the extraction of the gas from the well, Corbett proposed taxing its transmission strictly within state lines.
Last September, the Department of Energy authorized a facility in Maryland to be fitted so that Marcellus Shale gas can be exported out of the country, which means an export boom in the region, including Pennsylvania is likely.
And since the federal government regulates interstate transmission of the gas, much of the gas produced in Pennsylvania would likely escape the tax under Corbett’s suggested tax.
Corbett’s opponent Tom Wolf, who consistently leads Gov. Corbett by more than 15 points, is calling for a 5 percent severance tax.
A big factor in Corbett’s earlier push against the tax is a pledge he made while campaigning not to raise taxes in the state. He’s kept the pledge, but has been criticized for allowing cuts to state funding for education, and Republicans are frustrated he hasn’t accomplished more of his agenda in a legislature where the GOP controls both houses.
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