Thursday, August 21, 2014
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Corbett, Cawley defend $1.7 b tax break for Shell Oil

Both Gov. Corbett and Lt. Gov. Jim Cawley today defended the proposed $1.7 billion tax break for Shell Oil for a petrochemical refinery in western Pennsylvania as way to bolster the state's manufacturing base.

Corbett, Cawley defend $1.7 b tax break for Shell Oil

Both Gov. Corbett and Lt. Gov. Jim Cawley today defended the proposed $1.7 billion tax break for Shell Oil to build a petrochemical refinery in western Pennsylvania as way to bolster the state's manufacturing base.

 “My whole goal is to grow good, sustaining jobs for the people of Pennsylvania, not just today but for decades to come,” Corbett said in his first public comments about the tax proposal during an appearance on a Harrisburg talk radio show today.

 The 25-year tax credit was designed to seal the deal with Shell to build an ethane plant in Pennsylvania, rather than in neighboring states, Ohio and West Virginia, although talks are still ongoing. 

The governor's comments came as various groups lambasted the notion of doling out multi-billion tax break for one of the largest corporation's in the world, while cutting education as well as food aide, health care and other services for low income Pennsylvanians.

“The governor’s proposal violates his own belief that the free market, and not government, should pick winners and losers,” said George Jugovic Jr., president of PennFuture. “Let’s be clear – by choosing to offer Shell a $1.7 billion dollar tax break while proposing to cut nearly $900 million to public education, the governor is choosing winners and losers and he has cast his lot with choosing to further help a multi-billion dollar corporation over the education of future generations of Pennsylvanians.

The so-called "cracker" plant would convert ethane, a byproduct of the Marcellus Shale natural gas drilling industry, to ethlyene, which is used in products such as plastics.

The plant's opening, and the tax break, would come in 2017. Estimates suggest it would create 20,000 jobs.

Cawley, too, backed the job-creation potential of the plant. When asked about the size of the tax breaks at an unrelated news conference in the Capitol, Cawley said "Obviously the administration is committed to creating job opportunities in Pennsylvania. "

He called the deal a "wonderful way to partner with the private sector," but at the same time cautioned that while signals from Shell were good, the deal has not yet been inked. 

The tax credit will be "limited to 20 percent of the taxpayers’ qualified Pennsylvania tax liabilities," he added; the total maximum credits under the program would be $66 million in a year.

The Monaca site, north of Pittsburgh, is also eligible for Keystone Opportunity Zone tax breaks, giving the company a free ride on other state and local taxes.

A spokeswoman for Shell, a subsidiary of Netherlands-based oil and gas giant Royal Dutch Shell PLC, told the Associated Press the evaluation of the project is continuing, but that the company’s approach to investing “is to advance only those opportunities that are likely to provide long-term shareholder value.” The company welcomes such government incentive offers, spokeswoman Emily Oberton said in an email. 

 

 

 

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About this blog

Commonwealth Confidential gives you regularly updated coverage of the state legislature, the governor and the workings of the state bureaucracy. It is written by Angela Couloumbis and Amy Worden in the Inquirer's Harrisburg bureau, based right in the statehouse, and by the newspaper's far-flung campaign reporters.



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