GOP Lt. Gov. candidate: No severance tax for Marcellus Shale

By C.J. Marshall (STAFF WRITER)
Published: September 4, 2010

Article Tools
Font size: [A] [A] [A]
Sign Up newsletter

Photo: N/A, License: N/A, Created: 2010:09:03 10:02:38

Review Photo/C.J. Marshall James Cawley, Republican candidate for lieutenant governor of Pennsylvania, campaigns Friday in front of the Bradford County Courthouse. Cawley is running with Tom Corbett, who the Republican gubernatorial candidate for Pennsylvania.

TOWANDA - While stumping in Bradford County on Friday, Republican candidate for Pennsylvania lieutenant governor James Cawley re-emphasized his running mate Tom Corbett's stand against imposing a severance tax on gas drilling industries who have been tapping into the Marcellus Shale.

Cawley, a Bucks County Commissioner, was at the Bradford County Courthouse on Friday campaigning for himself and Corbett, who is the Republican gubernatorial candidate in Pennsylvania.

The commonwealth currently has no severance tax on natural gas operations, a fact which has been heavily discussed by the state legislature for the past several months. A movement has been afoot in Harrisburg to impose a severance tax by October, and if approved by Gov. Ed Rendell would become law before Pennsylvania's new governor would be inaugurated following the General Election in November.

Corbett has expressed his opposition to a natural gas severance tax, and Cawley elaborated on his running-mate's position during a question-and-answer session Friday at the courthouse.

"We believe a severance tax on the Marcellus Shale is basically - to use the analogy - it's killing the goose that lays the golden eggs, and then cutting the goose open and finding that there are no eggs inside," Cawley explained. "If you make the tax structure in Pennsylvania uncompetitive with the rest of the country when it comes to natural gas exploration, those natural gas drillers are going to move somewhere else."

Such a move, Cawley continued, would have an adverse affect on all the industries that have been experiencing growth in Pennsylvania due to the exploration for natural gas.

"There area all sorts of industries that are growing as a result of this natural gas exploration," Cawley said. "So the last thing we want to do is chase folks away. So we are and would continue to be opposed to a severance tax on natural gas."

When it was pointed out that many other states already levy severance taxes on natural gas, Cawley said those states don't have the corporate tax structure used by Pennsylvania.

"Pennsylvania has one of the highest corporate net income taxes in the nation at 9.99 percent," the candidate said. "Pennsylvania is still one of only three states in the union that has a cap on the net loss carry forward."

One thing that is particularly onerous to Pennsylvania's small business community - particularly in agriculture - is that the state still levies an inheritance tax, Cawley said. There are many instances, he said, where the heirs of a farm or small business have to sell off part interest, or all the interest, just to pay the inheritance tax.

"That's government denying people the American Dream," Cawley said. "Not empowering them to it. So when you say that other states have one sort of tax or another, you have to look at the total tax picture that an industry is facing, rather than one particular new tax being bandied about."

It was also pointed out that there are few other areas of the country that have the Marcellus Shale's potential for natural gas development, and the gas companies would want to exploit it regardless of a severance tax. Cawley agreed that gas companies have already begun to develop the Marcellus Shale, but greater development would not be encouraged by imposing additional taxes.

"There has to be a healthy development between meeting the need," Cawley said. "And there are several needs that come from gas exploration. We all want clean air. We all want clean water. We all want to be good stewards of the environment. So there are environmental impacts that we have to address. We have to recognize too that there are communal impacts. Certainly, the infrastructure stress of the larger trucks on roads that historically haven't felt that sort of infrastructure problem.

"There needs to be that healthy balance between encouraging what very well could be the most historic economic engine in Pennsylvania's history, versus the needs to make sure that our Pennsylvania and its communities are taken care of," he continued. "And I think we can strike that balance. But I don't think that a severance tax on Marcellus Shale is the way to get there."

Concerning the movement in Harrisburg to impose a severance tax on natural gas, and how to guarantee that local communities receive their fair share if it is approved, Cawley said he has a problem with that way of thinking.

"That's been a great frustration of mine that we have to pre-presume that a tax is going to be had, whether or not we want it. And that we have to make sure that if we do get it, we get our fair share. I guess I have difficulty with the premise, in that I'm going to be standing up, and Tom Corbett is going to be standing up, and saying a further reach into people's pockets - be it our corporate citizens or our private citizens - is not good, it's not healthy for Pennsylvania."

C.J. Marshall can be reached at (570) 265-1630; e-mail: cjmarshall@thedailyreview.com.

Ads by Yahoo!
We welcome user discussion on our site, under the following guidelines:

To comment you must first create a profile and sign-in with a verified DISQUS account or social network ID. Sign up here.

Comments in violation of the rules will be denied, and repeat violators will be banned. Please help police the community by flagging offensive comments for our moderators to review. By posting a comment, you agree to our full terms and conditions. Click here to read terms and conditions.
comments powered by Disqus