This week, the Wolf Administration, business community and the leaders of the General Assembly continued to face off over pension reform and severance taxes, two major pieces of the 2015-2016 budget puzzle.
The Wolf Administration had hoped to continue a focus on the severance tax and school funding, but last week, a letter from business and gas industry trade groups that said Wolf’s plan will “set the commonwealth back instead of allowing the state to grow its economy, jobs and provide Pennsylvanians with lower energy bills,” Wolf raised the rhetoric level in a response early this week,
Wolf issued a letter to about a dozen organizations, including the Pennsylvania Chamber of Business and Industry, the Marcellus Shale Coalition and the Pennsylvania Builders Association, saying the letter was “simply talking points from the oil and gas drillers. It is bogus rhetoric, and it does nothing to change Pennsylvania, fix our schools, or create jobs.”
In his letter, Wolf emphasized that he is “disappointed that you have come out in opposition to a commonsense severance tax that will help to fund Pennsylvania’s schools and achieve many of our shared priorities.”
He cited a recurring theme, noting, “We cannot keep doing the same thing and expecting different results in Pennsylvania…Now is the time to do big things in Pennsylvania.” The full text of Wolf’s letter can be found here.
Speaking at a Pennsylvania Press Club event, McGinty said lawmakers needed to start working in the same bipartisan fashion that they had when the House passed a school property tax bill last week.
“We need to keep moving on this key part of a responsible budget,” she said.
In reference to Pennsylvania being the only major energy producing state without a severance tax, McGinty stated, “The impact fee (on drillers) is a paltry substitute for a severance tax.”
Wolf’s proposed severance tax includes 5 percent on the value of gas at the wellhead plus 4.7 cents per thousand cubic feet of volume. This revenue would be used to help restore earlier cuts to public education. He also would use severance tax revenue to maintain a local impact fee to local governments in the drilling region that was enacted in 2012, but local governments want the impact fees to increase with collections.
The PA Business Council said there is “no logical public policy purpose to either limiting Marcellus Shale natural gas production or artificially increasing the price of this feedstock and fuel.”
While attempting to solidify the Administration’s response, McGinty told the Press Club Luncheon that the Senate’s pension reform bill, SB 1 was “a huge, and I’m sure to taxpayers unacceptable, lavish payout to legislators.
“The legislators who voted for this voted to line their own retirement pockets with a payout that is 2.5-times the pension benefit that will be earned by the average Joe, the average employee.”
Senate spokesperson Jennifer Kocher said “While she may continue to operate in campaign mode, we in the Senate are attempting to present a plan that would lead to a civil policy dialogue,”
So there you have it. Both sides looking for civil policy dialogue to reach a budget agreement, while effectively taking shots at each other publicly.