The Pennsylvania governor’s office responds

January 26, 2012

On my post arguing that the state of Pennsylvania will forgo $24 billion in royalties from gas fracking, the governor’s office has responded:

The premise of the article – that PA will “forgo” billions in royalties because it does not adopt a severance tax – is simply misplaced – and misleading.

First, any fair consideration as to the value that Pennsylvania taxpayers will receive from natural gas development would include ALL taxes paid by operators, and landowners, engaged in the activity. Nowhere in the analysis is consideration given to the hundreds of millions of dollars paid annually already under the state’s existing corporate net income, personal income, capital stock and franchise, liquid fuels and other taxes. While many states [against] which Pennsylvania is actively competing for limited capital investment may impose some level of severance tax, they do not impose the same suite of taxes.

Second, and more importantly, Governor Corbett was elected under the premise that we do not tax ourselves to prosperity. Creating an economic atmosphere which grows jobs and attracts investment will do more to increase revenue than adding new layers of taxes on job creators and Pennsylvania landowners.

Natural gas development is an oasis in an economic desert we all hope to emerge from as soon as possible. This activity is putting tens of thousands of Pennsylvanians back to work. And guess what? They all pay taxes. Its lowering energy prices for Pennsylvania businesses – letting them hire more, produce more and yes, pay more in taxes as they do better.

It makes no sense to squander this opportunity.

Patrick Henderson, Energy Executive
Governor Tom Corbett

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