Severance Tax


As the state budget impasse wears through its fifth month, service organizations and some of their funders are calling on state lawmakers to take action before services and programs statewide face more delays in funding.

The Pittsburgh Foundation partnered with the United Way of Allegheny County to launch a social media campaign using #PAPeopleCount. The groups are asking service providers, nonprofits and residents to let their digital voices be heard.

AP Photo/Keith Srakocic, File

Economists are questioning a top Senate Republican’s claims that a new tax proposed by Democratic Gov. Tom Wolf would devastate the natural gas drilling industry.

On WITF’s Smart Talk, Senate President Pro Tem Joe Scarnati responded to a comment about polls showing the majority of Pennsylvanians support a severance tax on natural gas drillers.

Reid Frazier / The Allegheny Front

Gov. Tom Wolf said he would be "willing to have conversations" about compromises on the 5 percent severance tax on natural gas he's proposed to balance the state budget.

"I'm willing to have conversations," Wold told reporters while touring Big Beaver Elementary School in Darlington on Monday. "I want a better Pennsylvania. If I'm convinced we can have a better Pennsylvania with something better than what I've proposed, then I'm all ears."

Lindsay Lazarski / Keystone Crossroads

The centerpiece of Gov. Tom Wolf's state budget died its umpteenth death around a negotiating table this week.

Republican legislative leaders emerged from closed-door negotiations with the Democratic Wolf administration to announce that the governor's proposed severance tax on natural gas drillers is a non-negotiable no-go.

AP Photo/Keith Srakocic, File

Gov. Tom Wolf argued last week that taxing Pennsylvania’s booming natural gas industry could help compensate for an anticipated $1 billion structural budget deficit in 2016.

His budget includes a state severance tax of 5 percent on extractions based on the value of gas at the well head and a charge of 4.7 cents per thousand cubic feet extracted. The commonwealth produced 3.23 trillion cubic feet in 2013.

AP Photo/Keith Srakocic, File

When Gov. Tom Wolf was campaigning, he said if elected he would place a severance tax on Marcellus shale gas in the commonwealth, and now he’s moving forward on a plan to do just that. The County Commissioners Association of Pennsylvania, however, doesn’t agree with some changes.

As Pennsylvania lawmakers grapple with finalizing the state budget, and face a financial shortfall, lawmakers and outside groups are calling for a severance tax on the natural gas industry to increase revenues.

The Ohio House of Representatives has voted to increase the state severance tax on oil and gas from less than 1 percent to 2.5 percent. As Pennsylvania continues to debate whether it, too, should impose a severance tax on the booming Marcellus Shale play, some Ohio democrats say the proposed hike is not good enough.

Republican Gov. John Kasich wanted a bigger tax hike, as well. But Ohio Rep. Matt Huffman, who sponsored the bill, said he ended up with 2.5 percent because “that was what I thought we could get done. That was what all parties could agree to.”

Another Marcellus Shale drilling policy, which includes a 5 percent severance tax, is being proposed by a Philadelphia lawmaker.

State Sen. Mike Stack (D-Philadelphia) announced last week that his legislation would impose an extraction tax which would overlap the existing impact fee, a policy that mirrors West Virginia law. The Corbett administration and Republican-controlled Legislature have resisted a severance tax.

Citing a report by Reuters, Stack said Pennsylvania stands to lose more than $20 billion over the next 20 years if a severance tax is not adopted.

Talk of low state revenues is prompting Republicans in the General Assembly to suggest new taxes could be under consideration, including the the ever-polarizing severance tax on natural gas drillers. But there are no clear indicators an extraction tax could pass anytime soon.