Severance tax

Last night at Rep. Heffley’s Town Meeting, a member of the audience asked Mr. Heffley why Pennsylvania didn’t impose a severance tax on the energy companies that were drilling for natural gas.

Rep. Heffley replied that those companies were paying “impact fees,” and that while we were constantly told that Texas imposed a severance tax, Texas had no corporate income tax, while Pennsylvania did.

Sen. Yudichak was the guest speaker at the Palmerton Area Democratic Club tonight, and I asked him about this.  The senator noted that North Dakota, with 700,000 people, received about two billion in severance fees from fracking companies, while Pennsylvania, with 12 million people, received about two hundred million in “impact fees,” and those impact fees varied from county to county.

Sen. Yudichak also pointed out that many of the drilling companies were chartered in Delaware, which allowed them to escape the corporate tax, and, in any case, the corporate tax was the same rate as that for individuals.  

Campaign contributions should be considered investments.  The drilling companies sure got their money’s worth in their investment in Gov. Corbett.