Wolf’s Test For Lawmakers
Gov. Tom Wolf’s proposal for a substantial statewide infrastructure program, funded by a tax on natural gas production, blows up yet another excuse that industry-besotted legislators use to shortchange Pennsylvania taxpayers. The gas industry’s development itself, fostered and nurtured by the people of Pennsylvania through their state government, has eliminated many of the arguments that some legislators used to shield the industry from fair taxation. Gas production is now a mature enterprise, rather than what its advocates in the Capitol regularly have characterized as a nascent, fragile industry that could not possibly bear the burden of the same sort of tax that it pays in every other gas-producing state. To ease that burden further, state lawmakers have lavished subsidies on elements of the industry, eased its ability to build pipelines and locate production facilities for its convenience, and shielded it from public health assessments. Rather than the same sort of tax on production, known as a severance tax, that every other gas-producing state imposes on the industry, Pennsylvania lawmakers instead concocted a “local impact fee” that is a massive tax break for the industry. As more and more pipelines criss-cross the state, carrying Pennsylvania gas to ever-expanding domestic and foreign markets, fewer excuses remain for failing to impose a fair tax. Now Wolf has eliminated another one. A mantra among lawmakers who represent the industry’s interests is that imposing a state-level production tax simply would send the money into the gaping maw of the state government, where it would be spent unaccountably, never to be seen again. The governor has proposed establishing a $4.5 billion infrastructure development plan, including flood control, blight elimination, rural broadband development and other matters that are important statewide. The state would issue bonds to borrow the money and the severance tax revenue would be used to pay the debt over time, in effect a dedicated tax. Such a project would produce tangible results and the money would be encumbered, rather subject to discretion under the general budget. The proposal is a test for lawmakers whether they will serve the industry’s narrow interests or the public’s broad interests. It’s time for a majority of them finally to get on the right side of the issue.