Why Pa. mustn't levy new tax on gas drillers

Jim Cawley

is lieutenant governor

of Pennsylvania and was chair

of Gov. Corbett's Marcellus Shale Advisory Commission

What if there was an industry that had 70,000 Pennsylvanians working in it - or providing supplies to it - and that industry was being lobbied to move to West Virginia? Wouldn't Pennsylvanians rightly demand that our leaders do everything possible to keep these jobs here? From loans for capital improvements to tax incentives, wouldn't everything be on the table?

What if there was a new industry - one projected to hire 200,000 Pennsylvanians over the next decade - that was debating whether to set up a corporate headquarters in Edmonton, Alberta (Canada), or Williamsport, Pa.? Wouldn't we expect our elected officials to meet with those industry executives and promise them anything and everything in tax breaks and incentives to encourage them to pick Pennsylvania?

These are not hypotheticals. There is, indeed, a new industry that employs 70,000 Pennsylvanians and, according to Pennsylvania State University, is likely to hire up to an additional 200,000 Pennsylvanians in the next decade. And this industry does not want tax breaks, government loans, or incentives to make Pennsylvania its home.

The new and growing natural gas industry - working to develop the Marcellus Shale - is a vibrant industry that is transforming our economy, creating jobs, and lowering the cost of energy. (The use of cleaner-burning natural gas will have the added benefit of improving our air quality.)

So why are critics of this industry so focused on creating new, punitive taxes on it?

The constant drumbeat for the imposition of a so-called severance tax is completely misguided. Having just completed my work as chairman of Gov. Corbett's Marcellus Shale Advisory Commission, allow me to point out a few facts.

First, calls for a severance tax imply that these businesses are not already paying taxes. Not true. Since 2006, this industry has paid almost $1.1 billion in taxes - and counting. In just the first six months of 2011, more than $292 million in taxes have been paid, more than the industry paid in all of 2010.

That revenue is in addition to more than $214 million in income taxes paid by natural gas employees and landowners leasing their land to gas companies.