Governor Wolf: Severance Tax Right Thing to Do

Harrisburg, PA – Today, Governor Tom Wolf stood with Southeast lawmakers to urge the legislature to pass a severance tax.

“The fairest and simplest solution to the current budget challenge is a severance tax on natural gas production,” Governor Wolf said. “The House could still do the right thing and vote on a severance tax.”

The Independent Fiscal office recently reported that more than 80 percent of Pennsylvania’s natural gas is purchased by residents in other states and even international markets.

“That means that 80 percent of the revenue raised by a reasonable severance tax will be paid by customers outside of Pennsylvania,” Governor Wolf said. “Our gas is currently being used tax-free by citizens of other states, while Pennsylvanians are paying taxes that help build roads and schools in Texas and Louisiana. Pennsylvanians deserve to share in this prosperity.”

Because so much of the severance tax will be paid by customers outside Pennsylvania, a severance will have a minimal effect on utility bills.  Estimates by independent agencies suggest that if Governor Wolf’s severance tax proposal is enacted, Pennsylvania electric bills will increase at a rate significantly less than the rate of inflation.

“Sixty-seven severance tax bills have been introduced in the legislature over the past seven years with only one, which was passed by the Senate this year as part of the budget, ever receiving a vote,” Governor Wolf said. “It’s beyond time to get this severance tax passed; a tax that will only benefit Pennsylvanians.”