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Counting golden eggs

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A few months ago, Washington County Commissioner Larry Maggi summed up his fear of what fellow politicians might do with higher taxes on the state’s gas drillers.

“They see a golden goose and want to strangle it,” said the Democrat, whose county is benefiting greatly from the $200 million the state has been collecting annually in per-well impact fees.

Photo credit: Dallas Morning News

Photo credit: Dallas Morning News

A wolf seems to be nosing around that, er, goose house.

Democratic candidate for governor Tom Wolf this week employed similar imagery to describe the potential he sees in an extraction tax to fund his list of spending priorities.

He told Trib reporters and editors on Tuesday that the gas industry is “the goose laying the golden egg,” before giving some examples of how he wants to dice it. Several hundred million dollars more going to the general fund could help fuel struggling schools, prop up the underfunded pension system and plug the budget deficit, he said.

“That would make Pennsylvanians a partner with the industry,” he said about what he called a “reasonable” severance tax.

Wolf called claims by the industry that higher taxes would push drillers to less-expensive shale plays “disingenuous” because “the market is here.” That drew a rebuke from the shale lobby.

“While shale development will remain here, the industry’s growth potential – and the broad-based associated benefits that could be fully realized – will be unnecessarily jeopardized. To suggest otherwise is disingenuous,” said Marcellus Shale Coalition President Dave Spigelmyer.

Wolf said he wanted to add a tax based on how much money wells were making on top of the per-well fee that mostly benefits host communities, bringing the total collected to about 5 percent of gas revenue. A state estimate this year put the impact fee’s equivalent at about 2 percent.

Wolf conceded that calculating the tax rate could get tricky — should it be based on wellhead prices or the much higher benchmark prices that energy companies are not getting?

He also did not explain how that gas money — about $500 million if we’re going from 2 percent to 5 percent — would pay for all those initiatives.

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Author: David Conti

David Conti covers the energy industry and related environmental news for Trib Total Media. He is a veteran journalist with 18 years of experience covering news and other aspects of Western Pennsylvania.

 
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