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Gas tax could factor into Pennsylvania gubernatorial race

| Monday, March 10, 2014, 11:12 p.m.

A debate over how to tax the plentiful gas from Pennsylvania shale is intensifying and will remain prominent this election year as Democrats use it to attack Gov. Tom Corbett, observers say.

“There's no question this will be a very strong issue. It's a populist issue, arguing that corporations are not paying their fair share,” said Joseph DiSarro, chair of the political science department at Washington & Jefferson College. “It fits the Democrats' set of values.”

All seven candidates for governor in the May 20 Democratic primary say they support some form of a severance tax based on the value or volume of gas and liquids from wells.

Corbett, a Republican running for re-election, opposes a tax and opted for an impact fee based on a per-well formula that took effect two years ago. Corbett's primary opponent, Bob Guzzardi of Montgomery County, said he is against any new taxes or fees, including targeted taxes on specific industries.

On Monday, the Pennsylvania Budget and Policy Center joined tax groups in Ohio and West Virginia in calling for uniform severance taxes in the states, and released a joint letter to the governors seeking their adoption.

State Rep. Gene DiGirolamo, R-Bucks County, said he will introduce legislation proposing a severance tax on top of Pennsylvania's impact fee.

“We believe that cooperation will strengthen our respective governors' hands in dealing with the energy industry,” said the center's director, Sharon Ward. She and other group leaders said states should reap the industry's benefits to pay for roads, education and impacts from drilling.

Corbett's office and industry leaders called the groups' suggested tax rate of at least 5 percent out of touch with reality. Lawmakers have rejected several proposals to tax at various rates.

“One could point to innumerable disparities with other states that Ms. Ward and her colleagues seem to conveniently overlook,” said Corbett's energy executive, Patrick Henderson.

He and leaders of the lobbying group Marcellus Shale Coalition and the Pennsylvania Chamber of Business and Industry said drillers and related companies face additional Pennsylvania taxes that are higher than those other gas- and oil-producing states impose. Money collected from the impact fee is expected to top $600 million in April.

“We need to compare apples to apples,” said Dave Spigelmyer, president of the shale coalition.

Chamber CEO Gene Barr said more taxes will harm an industry that could help the United States reach energy independence.

“I'm still mystified by these group attacks on the industry,” Barr said.

Expect them to continue.

DiSarro noted that York County businessman Tom Wolf, an early front-runner to become the Democratic Party's nominee for governor in at least two polls, released a campaign ad criticizing Corbett's approach to the energy industry.

State party spokeswoman Beth Melena said passing an impact fee is “one of the governor's big failures.”

“He let them run free without a tax,” she said about energy companies, repeating a theme that candidates have pushed during debates.

Henderson said the state collected more than $2.1 billion in tax revenue generated by oil and gas activity since 2008.

“Governor Corbett's interest and priority is in attracting jobs and capital investment to Pennsylvania, not enacting higher taxes on Pennsylvanians,” he said.

David Conti is a Trib Total Media staff writer. Reach him at 412-388-5802 or Staff writer Melissa Daniels contributed.

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