Impact Tax

Natural Gas Impact Taxes Continue to Benefit Pennsylvania.

When talking about the nuts-and-bolts of policy, it’s easy to lose sight of the real-world impacts of various regulatory choices. In Pennsylvania, where Gov. Tom Wolf continues to press for higher taxes on the commonwealth’s natural gas producers, the benefits of existing impact taxes on producers shouldn’t be overlooked.

Since its creation, this tax has generated more than $2 billion for distribution to communities across Pennsylvania – used for public infrastructure, storm water and sewer systems, public safety, tax reductions, housing and more.

Here’s the state’s chart showing annual revenues generated by the impact fee over the past several years: since its inception:

Much of the money goes to local governments across Pennsylvania, including those in areas that aren’t natural gas producers.

For some, it’s not enough. Despite the wide-reaching benefits of Pennsylvania’s Impact tax, Wolf and his allies in the legislature continue to target through a proposed severance tax, risking harm to ongoing energy activity and economic growth — and the significant benefits to people all across the state — instead of working to expand opportunity through pro-growth policies.

We’ve likened past proposals for a severance tax to the folly of killing the goose that lays golden eggs, and this point remains true. API PA executive director Stephanie Catarino Wissman:

“This tired proposal for a duplicative tax misses the facts: the simple economic concept that if you tax something you’ll get less of that something. In this case that’s natural gas production, a key driver of the state economy in recent years. Pennsylvanians are realizing the benefits of an energy renaissance… Impact tax dollars are helping to fix our roads, fund critical infrastructure projects, and invest in our communities. And if that’s not enough, the very industry the Governor wants to tax again is in large part responsible, as we’ve seen in the last decade, for helping school districts in the commonwealth save tens of millions of dollars on energy every year – unrelated to the impact tax contributions that we’ve already made.

“Governor Wolf’s proposal would move the commonwealth backwards. Unnecessarily jeopardizing investment in all 67 counties and risking good family-sustaining jobs while the commonwealth benefits less and less is the wrong direction. Our industry wants Pennsylvania to be as competitive as possible; the Governor’s proposal is a bad deal for Pennsylvanians.”

If it weren’t already abundantly clear, the state should say no to any anti-growth, anti-energy plan that could take Pennsylvania’s economy, energy production and the benefits that output provides in the wrong direction.