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McCall for, Knowles opposes tax on Pa. natural gas industry

Published September 30. 2010 05:00PM

Democratic members of the Pa. House of Representatives successfully led the charge to pass an extraction tax on the production of natural gas in the vast Marcellus Shale formation.

The House Democratic Caucus said the tax will help "to fund critical environmental programs and aiding local communities impacted by the expansion of this industry."

The caucus, in a press release, said, "The decision by the state House to pass Senate Bill 1155, with a 104-94 vote, shows a bipartisan commitment to tax big energy companies dilling for natural gas in Pennsylvania and puts the state closer than ever to reaping hundreds of millions of dollars for local communities, counties, environmental efforts, senior citizens, and the state budget."

Rep. Jerry Knowles (R-Berks/Schuylkill) Wednesday voted against Senate Bill 1155, while Speaker of the House Keith McCall (D-Carbon) supported it.

Knowles said it was a severance tax on Pennsylvania's growing natural gas industry and called it a job killer that will send thousands of jobs out of the Commonwealth.

Noting that neighboring West Virginia's severance tax is only 5 percent, Knowles said if this tax is passed, natural gas companies could very well move to states where the tax is lower.

"At 10 percent, this would be the highest severance tax in the nation," Knowles said. "They put those drilling rigs on wheels for a reason. If we make it too expensive for these companies to do business here, they are going to go where it is cheaper to operate."

Knowles added that Democrats' claims that this is an environmental protection bill are just not true.

"This bill has nothing to do with protecting the environment," Knowles said. "Gas companies already pay a permit fee that has enabled the Department of Environmental Protection to hire more inspectors than any other state in the nation."

Knowles also noted that the bill would direct millions of dollars into the General Fund to allow Gov. Ed Rendell to continue his reckless spending.

"House and Senate Democrats are pushing this tax to keep a promise they made to the governor during the budget negotiations last summer," Knowles said. "The bulk of the revenue raised by this tax will end up under state control in one form or another. This is nothing but a revenue generating bill that will result in more of the wasteful spending we have seen for the last eight years.

"When I came to the House, I promised I would not vote for any tax increases," Knowles continued. "We have an opportunity to create thousands of good paying jobs. If this tax passes, we are going to send the natural gas industry packing, and they will take thousands of jobs and millions of dollars in revenue with them."

McCall said the bill passed by the House and includes a new Job Creation Tax Credit specific to the natural gas industry, which would provide and incentive for those companies to hire Pennsylvania workers.

"House Democrats want Marcellus Shale gas drilling in the Commonwealth to create good-paying permanent jobs for Pennsylvanians, and the tax credit aspect of this bill will make it easy for companies to choose to hire locally," McCall said. "This is about jobs that pay family-sustaining wages and help workers return dollars to their communities with purchases large and small."

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