Severance Tax on Natural Gas in Play
Today, House Appropriations Chairman Representative Dwight Evans spoke to non profits, progressives and labor about the budget and House Bill 2435
which he sponsored. House Bill 2435 attempts to add nearly $400 million to the general fund by, closing the corporate loophole tax, tax loose tobacco, snuff. chewing tobacco and cigars, tax natural gas extraction and retail sales tax collection exemption.
First closing the corporate loophole tax would add $67 million dollars to the general fund by forcing corporations to pay tax and file taxes in Pennsylvania. Nearly 70% of Pennsylvania corporations do not pay this tax leaving small business and tax paying citizens to foot the bill.
Currently large retailers that collect state sales tax are allowed to keep 1% for administration cost and if this exemption is lifted would add up to $74 million to the general fund.
A severance tax on natural gas extraction would add $179 million to the general fund of which 10% would go the local municipalities that host the development of natural gas, while the state collects the 90%. There is a cost shift that would force the gas companies to pay for environmental clean up, infrastructure maintenance and repair that thus far has been picked up by state and local governments.
Lastly the tax on tobacco products. Pennsylvania is one of two states who does not tax loose tobacco, snuff, chewing tobacco and cigars. This has been bought up before with little action, but would increase revenue by $42 million per year.
When asked how much support does the bill have Representative Evans responded 80 to 90 democratic members so far, but added that he would have to look at those numbers again after the primary election to see if incumbents lost seats. A question was asked if coalition groups could come up with voluntary cut to the budget which effects their interest and the response is yes. Current funding levels can not be maintained without significant tax increases which the general public will not tolerate.Chairman Evans commented about what was more important passing a budget on time or passing a budget without drastic cuts that leave people short on needed services.
By Pearre Dean