Breaking Deals with Job Creators Not Conducive for Economic Growth, Wagner says

HARRISBURG – Senator Scott Wagner (R-York) expressed his strong concerns for Pennsylvania’s economy as yet another effort is underway in the Capitol to levy a severance tax on Marcellus Shale.

“The mindset in Harrisburg is that we can tax our way to economic prosperity, but here is the reality: we cannot increase taxes on job creators and break deals with them while expecting them to invest and grow in Pennsylvania,” Wagner said.

Wagner points out that the entire state benefits from Act 13 of 2012, which levies an impact fee on natural gas production in Pennsylvania. The impact fee has generated over $1.2 billion to date, which benefits every county in the state. The impact fee also directly improves local infrastructure in counties with active gas drilling.

Wagner said he’s disappointed with some legislators who voted for Act 13 of 2012 and are now pushing for a severance tax despite the provision within existing law stating that if a severance tax is levied, the impact fee will expire.

Specifically, subsection 2318 of Act 13 of 2012 states that upon the imposition of a severance tax on unconventional gas wells, the impact fee will expire. However, the latest effort would impose both an impact fee and a severance tax on natural gas in Pennsylvania leading to double-taxation of the industry.

“Act 13 of 2012 was a plan negotiated by all sides and we are now shifting the rules because Governor Wolf refuses to look at reining in wasteful spending and holding our state agencies accountable,” Wagner said.

“Instead of devising tax increase ideas, we should be holding state agencies accountable for their mismanagement of taxpayer dollars,” Wagner said. “More importantly, we should be looking to grow jobs, not find ways to tax them out of this state.”

Wagner points to the recently-floated idea to levy a sales tax on commercial storage facilities in Pennsylvania.

“On one hand, we are asking Amazon to choose Pennsylvania as their site for their new headquarters, while at the same time, we want to levy a massive tax on their business. Either we want to grow jobs and employment opportunities for Pennsylvanians, or raise taxes and watch industries choose other states – it’s that simple.”