OPED: Big companies should pay their fair share

It is estimated that Pennsylvania has missed out on $1.8 billion by not having a severance tax on natural gas.

Mary Jo Daley
Pennsylvania state representative
Mary Jo Daley

The House Appropriations Committee is almost done holding budget hearings for Gov. Tom Wolf’s 2016-17 budget proposal. The committee is hearing fiscal requests from various state agencies. As a Democratic member of the committee, my colleagues and I are in a unique position: We are hearing testimony on a budget proposal for the upcoming fiscal year while a fully-funded budget for the current year remains unfinished.

Wolf proposed a 5 percent severance tax on natural gas drilling in his 2015-16 budget. It’s a tax that I supported, but was rejected by the full House. The governor is now proposing a 6.5-percent tax for 2016-17. It is estimated the severance tax, which would be effective July 1, would generate $217.8 million in new revenue for the upcoming year and $340.7 million in 2017-18. With our pressing need for new revenues, why reject this proposal?

Natural gas industry leaders and Republicans are again rejecting the tax, saying it wouldn’t bring in any money because natural gas prices are at record lows. As history has shown, what goes down inevitably comes back up. Eventually, those prices will rise — and without the severance tax, these companies will make even more money tax-free.

It is estimated that Pennsylvania has missed out on $1.8 billion by not having a severance tax on natural gas in place since 2011. Many people across Pennsylvania support the tax. In October 2015, Franklin & Marshall College conducted a poll and found 67 percent of state voters support a severance tax to help balance the budget.

Pennsylvania is the only state with significant gas and oil production that does not ask drillers to pay a tax. It’s time for that to change. It’s time for Pennsylvania, the state with the fastest-growing natural gas production, to finally receive a return on extraction of its natural resources.

State Rep. Mary Jo Daley serves the 148th Legislative District in Montgomery County.