PIOGA:  Natural Gas Severance Tax Hidden Again in Gov. Wolf’s Budget Address

Additional Tax Would Devastate Producers in Depressed Market Conditions

HARRISBURG, Pa. (Feb. 4) – Pennsylvania Independent Oil & Gas Association President & Executive Director Dan Weaver today issued the following statement regarding Gov. Tom Wolf’s proposal to impose severance tax on unconventional natural gas extraction to fund $4.5 billion for infrastructure improvements that have nothing to do with energy production:

“Governor Wolf today stated that his proposed budget ‘does not ask any of you to vote for any new taxes,’ a wholly disingenuous claim, given his failure, once again, to mention the natural gas severance tax he is seeking to fund his ‘Restoring Pennsylvania’ initiative. Omitting his plan for this devastating tax from today’s speech, for the second consecutive year, flies in the face of the need for transparency and honest dialogue in government that people of the commonwealth deserve.

“This tax, combined with the existing Impact Tax, would rank Pennsylvania’s severance tax structure as the highest in the nation, and do so during a time of extremely low commodity prices, cutbacks in drilling budgets by many producers in the state and a steady exodus of other producers to states with better climates for investment.

“‘Restoring Pennsylvania’ is what natural gas developers have been doing here for the past decade.  The Impact Tax, which no other segment of Pennsylvania’s economy pays and no other gas-producing state has, is restoring public assets and funding development projects in communities in all 67 of the state’s counties.

“Lawmakers must see through the governor’s efforts to put this tax scheme in a proposal accompanying the budget, rather than in the budget itself, and vote against any efforts to enact it.  Pennsylvania must draw the line against additional taxes on natural gas production and work instead on improving the competitiveness of its business climate.”

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