Dear Representative:
On behalf of the National TaxpayersUnion’s 17,000 members in Pennsylvania, I urge you to reject any severancetaxes that would excessively burden natural gas development in the MarcellusShale, and would impede job creation and the delivery of cheaper energy.
Since the first successful oildrilling in Titusville in 1859, Pennsylvania has benefited immensely from itsabundant natural resources. The Commonwealth stands to benefit again thanks tonew technologies that allow development of the enormous natural gas reserveswithin the Marcellus Shale. Marcellus projects have already created thousandsof jobs and yielded more than $1 billion in tax revenues. A study by Penn StateUniversity estimates that continued development would provide 111,000 new jobsand $987 million in revenues by 2011. These jobs cut across the manufacturing,service, and retail sectors – a testament to the widespread economic activitythat would occur in the region. With Pennsylvania’s unemployment rate reaching9.3 percent in July, this is an opportunity the Commonwealth cannot afford tomiss.
But a high severance tax on natural gas productionwould stifle development of the Marcellus Shale. According to the CommonwealthFoundation, states with high severance taxes, such as West Virginia, have notexperienced as much growth in the energy sector, including job creation, as stateswith lower or no severance taxes. States with natural gas industries, such as Arkansas,Oklahoma, and Louisiana, keep their severance taxes moderate to encourage morenatural gas production. Pennsylvania should use this opportunity to expand andinvest in the state’s energy economy rather than penalize and hobble it.
Instead of raising taxes, the bestway to solve Pennsylvania’s budget problems and clear the path to prosperity isto trim government spending and reform taxes. This recession has forcedPennsylvanians to prioritize their expenses and then cut what they cannotafford. It is only reasonable for their government to do the same. Moreover,Pennsylvania has the 11th-highest tax burden in the nation, whichincludes some of the worst corporate tax rates in the country. By reducing spendingand reforming taxes, Pennsylvania can solve its budget problems while alsolaying the groundwork for economic growth. Our members are counting on youto do so.
Sincerely,
JohnStephenson
StateGovernment Affairs Manager