Beware Marcellus Shale Extraction Tax

Have you heard these quotes lately? “Tax shale and put the money toward education” – “PA is the only state that doesn’t have a severance tax”. Westmoreland County Community College’s Advanced Technology Center is training workers for every …possible job in the Marcellus industry. If PA does something stupid such as raise the severance tax higher than neighboring states, the companies will put their equipment on something with wheels and move to Ohio. They can come back here when the business climate is more welcoming. The shale will still be here. And, when the jobs leave, the trained workers will follow. Right now the industry employs 240,000 people in our great Commonwealth.

PA doesn’t call it’s severance tax a severance tax, we call it an impact fee. Additionally we pretty much have the highest Corporate Net Income Tax in the country at 9.9%, right behind Washington DC. Some of the states that call their tax a severance tax, have low or non-existent corporate taxes, personal taxes, gas taxes. Texas has NO Corporate Income Tax. And every other state producing Shale has lower overall taxes. So, if we do something short sighted like raise the taxes to a level that puts us at a competitive disadvantage, and the companies take a hiatus from our non-business friendly policies, we will end up with less money in our budget for education instead of more.

The industry has paid over $2 billion in state taxes and over $400 million to local municipalities and counties that have drilling. So while the previously mentioned quotes sound good, if put into policy they will destroy employment and yield less money in the long run. BUSINESSES ARE NOT ATM MACHINES, they are job producers and economic drivers so the folks running our government should enact more welcoming policies, not more threatening ones.