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Wednesday, January 12, 2011

Centre Daily Times Editor Calls For Tax On Gas Drillers

Featured Guest Editorial

Corbett should levy tax on gas drillers

by Bob Heisse, Executive Editor
bheisse@centredaily.com

Centre Daily Times
State College, PA

Gov.-elect Tom Corbett and the new legislature will start work later this month, and their first weeks will tell a lot in how they plan to tackle the state’s fiscal challenges.

Pennsylvania political observers note that Corbett will have the same advantage as Republican Gov. Tom Ridge, who took office in 1994, to oversee the government with GOP majorities in both houses.

They face a projected $4 billion revenue shortfall and challenges all around. What will they work on first?

The best thing they could do right out of the gate is finish what was discussed endlessly last year. That is, they should levy a severance tax on the booming gas drilling industry.

Some may ask: Are you kidding? A tax would drive the business away and take jobs with it, they say.

They’re wrong. A tax wouldn’t make this industry turn the trucks around in the Keystone State. It faces taxes in every other state where it does business, and in fact it expects to pay a tax.

What would a tax bring? It would generate millions of dollars that could repair roads, help meet a growing demand on social services and meet other needs, according to the Pennsylvania Budget and Policy Center.

“Every hour, the natural gas industry gets an $11,000 tax break because lawmakers won’t enact a severance tax,” said Sharon Ward, executive director of the Budget and Policy Center, a nonpartisan, statewide policy research project that provides independent analysis on state budget and policy matters.

The agency has set up a severance tax ticker on its website, www.pennbpc.org/ severance-tax, that provides a real-time estimate of how much the state has lost since Oct. 1, 2009, by not having a tax in place. Last week that ticker stood at $118 million. “Pennsylvania is one of the only energy-producing states in the nation without a severance tax,” Ward said. “We shouldn’t be giving away this precious resource without asking companies like Exxon Mobil, Shell and Range Resources to chip in for the public costs of their activities.”

A tax should be structured so it sends money back to the communities impacted by gas drilling. In Centre County alone there already are 49 active drilling sites, according to the county’s Planning and Development Office, with at least 100 expected by the end of this year.

The state House passed a severance tax bill last year that drew opposition in the Senate, stalling any compromise. Corbett, who opposed a tax in the campaign, now has to work with legislative leaders to tackle the fiscal challenges, and he would do well bring all sides together and enact a severance tax on this industry to generate much-needed revenue.

That should happen before they approve any massive cuts in programs.


A poll currently on Centre Daily Times asking for readers opinion if PA should tax the gas drillers has indicated 78% of the respondents favor the tax to 20% against and 2% undecided. You can cast your vote and see current results here.

6 comments :

Anonymous said...

Any severance tax will result in less money available to contribute to the politicians. Doubt if this will ever pass.
Mike Fowler
Austin, PA

Anonymous said...

Mike,You hit the nail on the head!

Anonymous said...

For every tax dollar the gas industry does not pay, WE WILL HAVE TO PAY!

Mr Realistic said...

You "sheeple" need to try to understand this. If we levy taxes on the gas companies, they will pay the taxes to the state and up the rates to the consumer. It is a roundabout way for the state to get more of our money.....wake up and smell the bull...crap people!!!

Anonymous said...

Many factors influence the price of natural gas.
Historically the main influence
was supply and demand.
SOME of the influences currently are...
The amount of natural gas in storage,
We have plenty here,we are sending
our gas to Canada.
The process of extracting the Marcellus Shale gas is expensive.
Laying new pipelines
adds to the cost that is passed on to the consumer.
The speaker at the Marcellus Shale Task Force meeting said
we are poised to become a "major exporter of natural gas."
Supply and demand doesn't seem to influence local(Potter's) consumer prices.

Anonymous said...

I am certain that Corbett will continue to oppose this tax no matter what. $835,000 from the gas industry was contributed to Corbett. This industry now owns the state, its new governor included. Welcome to Pennsylvania politics, 2011 version. While we may have had a party shift ,has anything really changed from the days of "fast Eddie?"