What’s up with the state House debating and maybe even voting for a severance tax on natural gas?
Why now? The budget, with all its taxing, spending, and borrowing is done.
(Not well done, mind you, but done.)
A severance tax, Gov. Wolf’s white whale, has long been a nonstarter.
The Senate passed one acceptable to Wolf in July. The House refused to act on it.
Yet the House just spent a few days before Thanksgiving debating a tax on extracting natural gas from Marcellus Shale, and plans to continue that debate when it returns to session Monday.
This comes after a decade of failed efforts pitting Democrats supporting the tax against Republicans opposing it, and many rural lawmakers from drilling areas against many eastern lawmakers from no-shale zones.
It comes after not taxing extraction seemed settled law, since Republicans control the legislature, and despite Pennsylvania being the lone large gas-producing state (second only to Texas in 2016) without such a tax.
What gives? Smells like timing and politics.
The bill in question drew 400 amendments. That suggests lots of specific interest and tinkering at play.
So, it could be a fundraiser.
Offer something that’s loved or hated by monied stakeholders, drag out debate over days or weeks, then stand back to watch campaign cash flow.
This usually is called shaking the tree. In this case, it’s more like banging the pipe.
The Inquirer and Daily News reported that the industry spent $60 million-plus on lobbying and political contributions, especially to GOP leaders, since 2010, while they fought off nearly 70 gas tax measures.
Banging the pipe works.
But allowing a tax debate and vote also could be a political ploy.
House GOP Speaker Mike Turzai, a forever-opponent of a severance tax (actually, any tax) is an announced candidate for governor in 2018. A pillar of his nascent campaign is that he “protected” energy jobs by preventing a severance tax.
So, now headed into a campaign, he allows debate and maybe a vote on a tax he bottled up for years?
To demonstrate once again his ability to stop it? Show his pro-business value to all business? A Turzai spokesman would only say the House expects to take up the bill again Monday.
Severance tax supporter Rep. Kate Harper (R., Montgomery) says there are “hundreds of industry-friendly amendments” to decrease environmental protection efforts, speed up permits, or cut the cost of permit fees.
One defeated amendment sought a two-year moratorium on state Department of Environmental Protection regulations.
So, if the industry can get enough deregulation, could it live with a small severance tax? Or would Democrats vote against a bill weighted down with deregulation?
Finally, there’s the notion that southeastern county Republicans need some cover in 2018 when every House member and half the Senate face reelection. This after big Democratic wins at the local level Nov. 7 in the Philly ’burbs, especially Delaware County, and in fear of a potential Democratic wave next year.
GOP leaders could well be thinking: “Let’s let moderate R’s vote for the tax to show they’re not too conservative for the `burbs. They’re happy. We keep our majority.”
Is this bill for real?
“Oh, my God, yes,” says its sponsor, Rep. Gene DiGirolamo (R., Bucks), “it’s absolutely for real.”
His bill calls for a 1.5 percent tax (originally, he sought 3.2 percent) on top of a current drilling impact fee, the bulk of which goes to communities in drilling areas. He says it would raise $125 million to $150 million in new, sustainable revenue.
I’m not so sure. The Senate, which has only a few session days left this year, isn’t saying much beyond, “We’ll see what the House does.”
When pressed, lawmakers and senior staff in both chambers say they have no idea what happens next.
But in a place where politics so often trumps policy, it’s hard to see GOP leaders handing Democrat Wolf a major win as he runs for reelection.