Tax On Shale-Gas Drillers Would Punish Industry, Turzai says

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By Brad Bumstead

STEELTON — A 5 percent severance tax on shale gas drilling that Gov. Tom Wolf plans to announce would be punitive and would hurt a burgeoning industry in the long run, House Speaker Mike Turzai warned Monday.

The Marshall Republican said he has not seen details of Wolf’s budget proposal, which the governor will deliver Tuesday to a joint session of the state Legislature, but he expects a “significant increase in taxes and a significant increase in spending.”

Wolf won’t comment on the details until he announces his budget, spokesman Jeffrey Sheridan said.

Pennsylvania is the only gas-producing state that does not tax natural gas extraction, Sheridan said.

“Where are (drillers) going to go?” he asked.

Turzai spoke to reporters on a windblown hill at Dura-Bond Pipe, a manufacturer that intends to hire 150 people this year because of the thriving Marcellus shale industry, according to its vice president, Jason Norris.

Norris, an Export native, said he could not estimate how a tax might affect the jobs. Such taxes tend to get passed onto consumers, he said.

Dura-Bond Pipe employs about 350 people at a former Bethlehem Steel Corp. plant.

“We are fighting for survival” against foreign manufacturers, Norris said.

Overall, the shale industry has produced 240,000 direct and indirect jobs for Pennsylvania, Turzai said.

Some lawmakers and analysts expect that Wolf, a Democrat, will announce a plan that shifts some of the state’s tax burden from real estate taxes to income or sales taxes. Wolf emphasized the tax on shale-gas drillers in his campaign.

Asked whether a gas tax of some amount could be part of a compromise between the Republican-controlled legislature and Wolf, Turzai said: “We’re not there yet.”

“They may not be there,” Sheridan said, “but a majority of Pennsylvanians of both parties are there.”

He noted a poll released last week by the Marcellus Shale Coalition, an industry group, that found 49 percent of Pennsylvanians surveyed support a tax. Support has been higher in other polls, Sheridan said.

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