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Post by melody on Jun 9, 2014 20:23:58 GMT -5
PBPC PRESENTS REPORT ON DRILLING COMPANIES TAX LIABILITY
By Kati Lawson, PLS
6/9/14
The Pennsylvania Budget and Policy Center (PBPC) held a teleconference this morning to discuss a new report on the
amount of taxes oil and gas extraction companies actually pay.
PBPC Executive Director Sharon Ward prefaced the call by discussing the potential $1.5 billion budget shortfall facing
lawmakers while they craft the upcoming budget. She said lawmakers are considering a possible severance tax on natural
gas as a possible solution to filling part of the shortfall. Ward noted the issue is now bipartisan, with proposals from both
Republicans and Democrats in the House and Senate on the creation of a severance tax.
Ward opined the programs and services will be cut in the Commonwealth if additional funds are not found to fill the budget
gap. She explained the PBPC report studied the taxes paid by the shale gas industry and the impact of a severance tax on
future industry profitability.
Michael Wood, Research Director at PBPC, reported a five percent severance tax on natural gas could raise an additional
$400 million. He said the report focuses on three topics: the tax payments made by the gas industry, incentives used by the
industry to reduce tax liability, and an independent analysis of oil and gas extraction in Pennsylvania and how a severance
tax could affect that profitability.
Wood pointed out ways gas extraction companies are avoiding paying taxes. He said payments from extraction companies
have returned to levels similar to the period before extraction began in Marcellus Shale. Wood said extractors do not pay
property taxes on reserves, and receive federal tax breaks as well as manufacturing tax breaks and tax credits from the
Commonwealth.
“Independent analysis finds that well drilling will remain profitable with or without a severance tax,” stated Wood. He noted
the study found the impact on the return of investment for extraction companies would be very small.
Ward said Pennsylvania has a favorable tax environment for drillers; she noted drillers are not paying as much Corporate
Net Income Tax as the published rate. “We recommend the General Assembly adopt a five percent severance tax. We
believe across the Shale states there should be a common severance tax rate,” concluded Ward.
When asked if the severance tax would replace the current impact fee, Ward said the legislature could either keep the
impact fee and add a tax on top of it or set the severance tax at a particular rate and remove the impact fee altogether. She
said it is important that the current recipients of the impact fee continue to receive money so local governments may recover
the costs of creating an environment that is suitable for drilling.
A member of the press asked if a severance tax imposed at the start of drilling would have kept Pennsylvania out of its
current budget crisis. Ward remarked Pennsylvania’s budget shortfall is related to a number of things, but if the drilling fee
was in effect from the beginning “we would be in much better shape than we are today.”
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Post by bowbum on Jun 10, 2014 7:58:18 GMT -5
Just goes to show the brilliance of those making laws!
They've deducted that --- there are tax incentives in place to encourage business and energy development. (but they want to alter this)
They've deducted that --- getting more money from an industry would help the budget shortfall. (but they would quickly spend any additional income).
They've deducted that --- if they had had more money coming in since the beginning of drilling.....they would be in better financial shape!
Ya gotta love factual and precise scientific data!
Oh, nowhere, in their considerations, was there mention of where an extraction tax would impact the price of natural gas and be recouped......that would come from constituents ....but what the heck.
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Post by johns on Jun 10, 2014 8:01:11 GMT -5
Perish the thought that the general assembly would do what we do when our money doesn't cover everything we want, cut back on the unnecessaries.
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Post by fleroo on Jun 10, 2014 12:53:51 GMT -5
I received Marcellus lease money, twice. You know what I did with it ? Pumped it back into the economy for the most part. I bought "stuff". Some stuff were things I needed, but didn't have the extra disposable to purchase. Other stuff were things I didn't need, but decided "What the hey", I'm gonna get a toy or two since I can at the particular time.
It's funny how NOT TAXING a corporation into oblivion, will entice them into doing business in the state, thus, potentially passing on dollars they otherwise may not have had, to the tens of hundreds or thousands of state's resiednts, that in turn, will feed the economy. Not to mention, the many communities seeing a spike in revenue/funding at various levels... private, school, ma and pa stores and eateries. Yep, I think taxing these companies into oblivion and force them to do business elsewhere is the answer..... NOT. Haven't we learned a thing from forcing what were fine American corporations at one time, to operate south of the border, or Asia ?
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Post by Deleted on Jun 10, 2014 19:06:16 GMT -5
I received Marcellus lease money, twice. You know what I did with it ? Pumped it back into the economy for the most part. I bought "stuff". Some stuff were things I needed, but didn't have the extra disposable to purchase. Other stuff were things I didn't need, but decided "What the hey", I'm gonna get a toy or two since I can at the particular time. It's funny how NOT TAXING a corporation into oblivion, will entice them into doing business in the state, thus, potentially passing on dollars they otherwise may not have had, to the tens of hundreds or thousands of state's resiednts, that in turn, will feed the economy. Not to mention, the many communities seeing a spike in revenue/funding at various levels... private, school, ma and pa stores and eateries. Yep, I think taxing these companies into oblivion and force them to do business elsewhere is the answer..... NOT. Haven't we learned a thing from forcing what were fine American corporations at one time, to operate south of the border, or Asia ? Yep, the Corbett economic plan and the natural gas industry, now that we're the second largest natural gas producing state in the nation, are really paying off for us! State tax revenues are only down anywhere from $600-800 million, or more, below budget. PA is at the bottom of the barrel in job creation. Thank God for the "trickle down" from the gas industry! |
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Post by bake545 on Jun 10, 2014 19:43:06 GMT -5
I received Marcellus lease money, twice. You know what I did with it ? Pumped it back into the economy for the most part. I bought "stuff". Some stuff were things I needed, but didn't have the extra disposable to purchase. Other stuff were things I didn't need, but decided "What the hey", I'm gonna get a toy or two since I can at the particular time. It's funny how NOT TAXING a corporation into oblivion, will entice them into doing business in the state, thus, potentially passing on dollars they otherwise may not have had, to the tens of hundreds or thousands of state's resiednts, that in turn, will feed the economy. Not to mention, the many communities seeing a spike in revenue/funding at various levels... private, school, ma and pa stores and eateries. Yep, I think taxing these companies into oblivion and force them to do business elsewhere is the answer..... NOT. Haven't we learned a thing from forcing what were fine American corporations at one time, to operate south of the border, or Asia ? Yep, the Corbett economic plan and the natural gas industry, now that we're the second largest natural gas producing state in the nation, are really paying off for us! State tax revenues are only down anywhere from $600-800 million, or more, below budget. PA is at the bottom of the barrel in job creation. Thank God for the "trickle down" from the gas industry! Wonder what those numbers would look like without the gas industry? I'm tired of people who think there is a bottomless pit of money out there to tax. The state has plenty of money they just don't spend it wisely! |
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Post by Deleted on Jun 10, 2014 20:07:13 GMT -5
"Wonder what those numbers would look like without the gas industry? I'm tired of people who think there is a bottomless pit of money out there to tax. The state has plenty of money they just don't spend it wisely!"
In the USA only four states, Mississippi, Nevada, New Jersey and good old PA, are running deficits in their budgets this year. Most states are running surpluses.
The deficit in PA tax collections has nothing to do with new taxes but are, instead, a sign of the failing economy here.
I keep hearing how great the gas industry is for the state's economy.
If the gas industry is, in fact, pouring money into the state's economy that is a further indication of how badly PA's economic policies have failed.
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Post by Dutch on Jun 10, 2014 20:42:14 GMT -5
Just goes to show the brilliance of those making laws! They've deducted that --- there are tax incentives in place to encourage business and energy development. (but they want to alter this) They've deducted that --- getting more money from an industry would help the budget shortfall. (but they would quickly spend any additional income). They've deducted that --- if they had had more money coming in since the beginning of drilling.....they would be in better financial shape! Ya gotta love factual and precise scientific data! Oh, nowhere, in their considerations, was there mention of where an extraction tax would impact the price of natural gas and be recouped......that would come from constituents ....but what the heck. The price of nat gas is set by the commodities market, supply and demand. Its interesting that all these other state have severance taxes, but the oil and gas companies continue to drill..... The severance tax will not stop drilling here. |
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Post by bake545 on Jun 11, 2014 5:55:41 GMT -5
Just goes to show the brilliance of those making laws! They've deducted that --- there are tax incentives in place to encourage business and energy development. (but they want to alter this) They've deducted that --- getting more money from an industry would help the budget shortfall. (but they would quickly spend any additional income). They've deducted that --- if they had had more money coming in since the beginning of drilling.....they would be in better financial shape! Ya gotta love factual and precise scientific data! Oh, nowhere, in their considerations, was there mention of where an extraction tax would impact the price of natural gas and be recouped......that would come from constituents ....but what the heck. The price of nat gas is set by the commodities market, supply and demand. Its interesting that all these other state have severance taxes, but the oil and gas companies continue to drill..... The severance tax will not stop drilling here. Nor is it necessary to bleed every industry dry. Already high taxes for business are one of the reasons PA's economy stinks. |
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Post by bake545 on Jun 11, 2014 5:59:11 GMT -5
"Wonder what those numbers would look like without the gas industry? I'm tired of people who think there is a bottomless pit of money out there to tax. The state has plenty of money they just don't spend it wisely!" In the USA only four states, Mississippi, Nevada, New Jersey and good old PA, are running deficits in their budgets this year. Most states are running surpluses. The deficit in PA tax collections has nothing to do with new taxes but are, instead, a sign of the failing economy here. I keep hearing how great the gas industry is for the state's economy. If the gas industry is, in fact, pouring money into the state's economy that is a further indication of how badly PA's economic policies have failed. What baseline are you using to compare the drop in revenue? Pre or post temporary stimulus funds from the Feds? |
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Post by bake545 on Jun 11, 2014 6:00:09 GMT -5
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Post by bowbum on Jun 11, 2014 7:07:00 GMT -5
State tax revenues are only down anywhere from $600-800 million, or more, below budget. PA is at the bottom of the barrel in job creation. Yeah, it is truly incredible how the gas industry stole tax revenues and cost us so much money, ruined our employment picture by hiring people --- and drove us to the bottom of the barrel! Now I wish you would explain your expertise in figuring out how the gas industry did that. Or are you simply bemoaning the fact that they have not provided a cure all for poor policies of the past and accumulated deficit from those policies? Unreal! |
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Post by bowbum on Jun 11, 2014 7:09:36 GMT -5
The price of nat gas is set by the commodities market, supply and demand. Another business lesson! So, profits are not affect by heaping on additional costs eh? Other states have combined wildlife agencies. |
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Post by bowbum on Jun 11, 2014 9:35:21 GMT -5
Bake, ya gotta quit trying to show something that doesn't put the blame on natural gas. It goes against the extreme bias of some here.
" Pennsylvanians pay inflated taxes because the state's public corruption rate is among the highest in the nation, says a scholarly study based on data from the Justice Department. The report in Public Administration Review shows public corruption “implicitly causes taxpayers to pay more,” said John Mikesell, an economics professor at Indiana University and co-author of the study.
Corruption costs taxpayers about $1,308 per person more per year in states with the most corruption, "Natural gas has brought hundreds of millions, no, many "billions" to this state in employment, road building, gas payments, impact fees, disaster relief, charitable support and contributions ... all across every facet of Pennsylvania life. We have a high corporate tax structure, we have a political-welfare mentality to attack business and take from them simply because we can legislate it, we have cities and municipalities that have absolutely nothing to offer towards the gas industry.....all getting free money from "impact fees", and the worst part is the sickness manifests itself as ---------- politicians and people with an anti-government agenda have no guts to fix any problem, they simply want to point fingers and forcibly take from those who already are contributing....while they contribute nothing. You know, it really is funny. The extreme bias and anti-gas expressions here, as I recall seemed to start out as "environmental" concerns. Those 'fracking" fears were unfounded and after millions of wells fracked proved to be less of a concern than farming and truck driving. I recently posted a thread in this forum about a solvent spill into the river.... at Towanda. Have we seen one single person who is waving the anti-natural gas flag step up and show that indignation they feigned and pretended to have? Not one! Not one ounce of concern for the environment if it ain't natural gas related! Then there was all this "we care about state lands" crap! But no one knew how to counter that some of the mineral rights on some state lands belonged to private citizens who were extremely generous to our welfare by donating or selling cheaply those lands....having the right to have them be drilled. No one could really say that drilling would even hurt the cosmetics or habitat of those land if done a certain way. And no one had much to say about lifting an existing moratorium on drilling with "no new surface impact".....except claiming the idea was plagerized! I posted another account on the water and air quality testing going on in my neighborhood because a stupid land owner never thought to check his well pump, (which burned out), when he lost water flow, and convinced two other neighbors that they also had problems and they all ended up calling Chesapeake and demanding new wells etc. Chesapeake not only responded with four teams of independent technicians, they gave the guy a filled 500 gallon water buffalo and they tested every well, every pond and stream, plus hundreds of air samples in a radius of a half mile around the last well they drilled 9 months ago.....that is inactive and has not been fracked. They found absolutely "No" problems! Do we see "any" of the anti's here being shocked.....nope, it is normal mentality to them when there is a problem simply attack that which is sound, well managed and beneficial. We have a tirade about our state's employment and income status and instead of attacking policies they attack those who are contributing to fixing those problems for not doing more. In the end it comes down to money and the mentality of ---- we want it, we'll take it from others and we don't have to consider right or wrong because -------- other states do it! It's like a mother who blames the kids her kid hangs out with for getting him in trouble!  |
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Post by Dutch on Jun 11, 2014 20:40:12 GMT -5
Yes, I have such an extreme bias that my stock portfolio contains 3 gas related stocks.
Drill baby drill.
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Post by Deleted on Jun 11, 2014 21:24:22 GMT -5
Yeah, it is truly incredible how the gas industry stole tax revenues and cost us so much money, ruined our employment picture by hiring people --- and drove us to the bottom of the barrel! Now I wish you would explain your expertise in figuring out how the gas industry did that. Or are you simply bemoaning the fact that they have not provided a cure all for poor policies of the past and accumulated deficit from those policies? Unreal! Bowbum, Where did I say the gas industry stole tax revenues? WHERE? I said state tax revenues, from the collection of sales, income, corporate and all other state tax sources, are running at a $600-$800 million deficit from Corbett's budgeted collections! My point is that if the natural gas industry is the economic powerhouse you and others make it out to be that fact is not reflected by the tax revenues of the state. Either that, or the rest of the state's economy is on life support. The fact that the Republicans have been in charge of the budget process for the past three fiscal years lays the blame, whatever the reason, at their feet!
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Post by Deleted on Jun 11, 2014 21:28:39 GMT -5
"Wonder what those numbers would look like without the gas industry? I'm tired of people who think there is a bottomless pit of money out there to tax. The state has plenty of money they just don't spend it wisely!" In the USA only four states, Mississippi, Nevada, New Jersey and good old PA, are running deficits in their budgets this year. Most states are running surpluses. The deficit in PA tax collections has nothing to do with new taxes but are, instead, a sign of the failing economy here. I keep hearing how great the gas industry is for the state's economy. If the gas industry is, in fact, pouring money into the state's economy that is a further indication of how badly PA's economic policies have failed. What baseline are you using to compare the drop in revenue? Pre or post temporary stimulus funds from the Feds? No baseline used Bake. Corbett's current budget, passed by a Republican controlled legislature, made tax revenue estimations and the actual collection figures are what are running that large deficit. It has nothing to do with stimulus and everything to do with a sick PA economy!
This is one of many news articles that explain it: www.pennlive.com/midstate/index.ssf/2014/04/pennsylvania_gets_more_bad_bud.html
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Post by Deleted on Jun 11, 2014 23:08:45 GMT -5
Bowbum, You said, "You know, it really is funny. The extreme bias and anti-gas expressions here, as I recall seemed to start out as "environmental" concerns. Those 'fracking" fears were unfounded and after millions of wells fracked proved to be less of a concern than farming and truck driving. I recently posted a thread in this forum about a solvent spill into the river.... at Towanda. Have we seen one single person who is waving the anti-natural gas flag step up and show that indignation they feigned and pretended to have? Not one! Not one ounce of concern for the environment if it ain't natural gas related!" Well, here's one directly related to the industry and I haven't heard an uproar - the indictment of the Bolus family and their Minuteman businesses. If the allegations regarding their illegal disposal of drilling byproducts are true it demonstrates how detrimental environmental impacts of the fracking industry can impact communities far from the extraction site. The particulars of the indictment can be read here: sunbury.info/pdf/Bolus060614.pdfDo you want to bet who will end up paying to clean up the messes? |
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Post by bake545 on Jun 12, 2014 6:57:27 GMT -5
What baseline are you using to compare the drop in revenue? Pre or post temporary stimulus funds from the Feds? No baseline used Bake. Corbett's current budget, passed by a Republican controlled legislature, made tax revenue estimations and the actual collection figures are what are running that large deficit. It has nothing to do with stimulus and everything to do with a sick PA economy!
This is one of many news articles that explain it: www.pennlive.com/midstate/index.ssf/2014/04/pennsylvania_gets_more_bad_bud.html
From your article: "In a report issued Tuesday, the Nelson A. Rockefeller Institute of Government at the State University of New York suggested that states' personal income tax collections are lagging because taxpayers sold off securities in 2012 to avoid higher federal tax rates on capital gains that went into effect in 2013. As a result, it said, the sell-off likely created a "trough" in capital gains in 2013." Sounds like this is a problem created by Democrats, not the Republicans like you want to blame. Your own article contradicts your argument. Unlike you apparently I think there is plenty of blame to go around on both sides of the aisle. People who have picked political sides like it's a sporting event are the problem. Neither side cares about anything but staying in power. |
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Post by Deleted on Jun 12, 2014 7:07:48 GMT -5
We peons sure do waste a lot of time defending and/or blaming one political party or the other when the fault lies with the elected officials of the ruling class irregardless of party affiliation. Republican officials are for one thing and one thing only; that being keeping their elected office/career intact. The same is true of democrat elected officials. Any of that old time crap about democrats being for the working man and republicans being for the rich is just bullpuckey. They are for what it takes to get reelected. End of story.
If we voters actually used our heads we could effect change, but so long as we remain loyal to a party that has no loyalty to us, the game is over. Criticism of one party and not the other gains nothing, but might make those who don't do much thinking feel good, foolish though it be. I have taken an oath. I will vote for no incumbent ever again, regardless of what he/she promises or his/her party affiliation. If we all did that, think how fast things would change, but we will not. It might require real commitment. Besides, it is more fun to grouse and complain about things that to do something about it.
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Post by Deleted on Jun 12, 2014 8:04:58 GMT -5
No baseline used Bake. Corbett's current budget, passed by a Republican controlled legislature, made tax revenue estimations and the actual collection figures are what are running that large deficit. It has nothing to do with stimulus and everything to do with a sick PA economy!
This is one of many news articles that explain it: www.pennlive.com/midstate/index.ssf/2014/04/pennsylvania_gets_more_bad_bud.html
From your article: "In a report issued Tuesday, the Nelson A. Rockefeller Institute of Government at the State University of New York suggested that states' personal income tax collections are lagging because taxpayers sold off securities in 2012 to avoid higher federal tax rates on capital gains that went into effect in 2013. As a result, it said, the sell-off likely created a "trough" in capital gains in 2013." Sounds like this is a problem created by Democrats, not the Republicans like you want to blame. Your own article contradicts your argument. Unlike you apparently I think there is plenty of blame to go around on both sides of the aisle. People who have picked political sides like it's a sporting event are the problem. Neither side cares about anything but staying in power. Yep, if you want to pull out that one little "suggestion" that "likely" created a "trough" (not very definitive statements of fact) it can help explain some, but not all, of the tax lag. If this is indeed true, I will ask you then why didn't it affect 46 of the 50 states?
BTW, I agree with your assessment that both sides of the aisle are responsible; it's just the fact the R party is in complete control of PA's government right now that the blame falls most heavily on them.
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Post by bowbum on Jun 12, 2014 8:19:54 GMT -5
Yep, the Corbett economic plan and the natural gas industry, now that we're the second largest natural gas producing state in the nation, are really paying off for us! State tax revenues are only down anywhere from $600-800 million, or more, below budget. PA is at the bottom of the barrel in job creation. Thank God for the "trickle down" from the gas industry! You must be confused! You like to mention economic woes in the same sentence as the gas industry. You like to mention Corbett and the gas industry as one. You tie the two together in all ills of PA's economy. And yet you ask; "where did I say that?" I'd like an economy lesson on "how" when an industry pumps "BILLIONS" into an economy, does that entitle them to be tied to our economic woes in nearly every sentence? I don't really care that you blame decades of bad policies leading to our situation, (remember the years without a budget?), on the current administration......that simply is a political ploy that plays on people's ignorance. When it comes to the gas industry, there is a perverted bias present in our land that has a lot to do with political loyalty and whether or not you have an invested interest in the industry! All the talk of caring about conservation, environmentalism, sportsmen's future, pristine lands, economic strength, better roads, etc. it total bunk! |
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Post by bake545 on Jun 12, 2014 8:25:56 GMT -5
Yep, if you want to pull out that one little "suggestion" that "likely" created a "trough" (not very definitive statements of fact) it can help explain some, but not all, of the tax lag. If this is indeed true, I will ask you then why didn't it affect 46 of the 50 states?
BTW, I agree with your assessment that both sides of the aisle are responsible; it's just the fact the R party is in complete control of PA's government right now that the blame falls most heavily on them.
I'm sure there are a whole host of reasons for it. I just thought it was funny the article you posted contradicted your point, that's all.  I do agree the blame will fall with those in charge so I guess we can both agree the Dems are at fault too since they have had the most if not complete control over the federal govt since 2008. The bottom line is the economy is always going to be better in places with low taxes and less regulations, PA fails miserably on both counts. |
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Post by bowbum on Jun 12, 2014 8:29:00 GMT -5
Well, here's one directly related to the industry and I haven't heard an uproar - the indictment of the Bolus family and their Minuteman businesses. If the allegations regarding their illegal disposal of drilling byproducts are true it demonstrates how detrimental environmental impacts of the fracking industry can impact communities far from the extraction site. Can you really be that desperate? Bob Bolus is a known offender of about every regulation there is. He is not an employee of the gas industry any more than he is an employee of the federal government.....just because he pays federal taxes! The Bolus family is in trouble, "Again," because of insurance fraud in the Minute Man trucking company. That is not a gas owned company! Here it is Todd; That company, (Bolus family), is tied to the gas industry, the same as Dandy Markets is when they gas up company vehicles, the same as Dunkin Donuts is when they sell donuts to a drilling crew and the same as the roach coach guy who sells lunches at gas pads. You are a great example of people's perverted view of wanting to tie irresponsible behavior by private contractors to the gas industry. If a painter comes to your house to do a job and he leaves and purposely runs over a dog while driving out of your place......it for sure, using your method of logic, makes you a bad person. |
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Post by Deleted on Jun 12, 2014 8:45:00 GMT -5
Well, here's one directly related to the industry and I haven't heard an uproar - the indictment of the Bolus family and their Minuteman businesses. If the allegations regarding their illegal disposal of drilling byproducts are true it demonstrates how detrimental environmental impacts of the fracking industry can impact communities far from the extraction site. Can you really be that desperate? Bob Bolus is a known offender of about every regulation there is. He is not an employee of the gas industry any more than he is an employee of the federal government.....just because he pays federal taxes! The Bolus family is in trouble, "Again," because of insurance fraud in the Minute Man trucking company. That is not a gas owned company! Here it is Todd; That company, (Bolus family), is tied to the gas industry, the same as Dandy Markets is when they gas up company vehicles, the same as Dunkin Donuts is when they sell donuts to a drilling crew and the same as the roach coach guy who sells lunches at gas pads. You are a great example of people's perverted view of wanting to tie irresponsible behavior by private contractors to the gas industry. If a painter comes to your house to do a job and he leaves and purposely runs over a dog while driving out of your place......it for sure, using your method of logic, makes you a bad person. Bowbum, Maybe, if Bolus has the reputation you point to, the gas companies who hired him should have used a little more diligence in whom they do business with just as I would if I were hiring a painter. |
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