Turzai protests any new shale tax

HARRISBURG - House Speaker Mike Turzai took aim Tuesday against any new severance tax on natural gas drilling in the state, warning it may cost jobs and harm the industry.

Turzai called a news conference to attack a proposal by Gov. Wolf to increase taxes on the industry to generate new money for education. "The governor is basically calling for a de facto moratorium" on drilling, Turzai said, "like New York has."

He said the natural gas industry is already producing about $200 million annually in the form of an impact fee that is mostly targeted to areas where the drilling occurs. The industry is creating work for steel manufacturers, engineering firms, and refineries statewide, he said.

Wolf spokesman Jeff Sheridan said the governor's severance tax would raise about eight times as much as the impact fee and would leave $225 million annually in the impact fee. "These companies will not go anywhere. The gas is here and every other state that produces gas has a severance tax," Sheridan said.

The Republican speaker and other legislative leaders met again Tuesday with Democrat Wolf about how to plug a massive projected budget gap in the fiscal year that starts in July. Turzai said his focus on the proposal - among several new taxes Wolf supports - had nothing to do with the status of budget negotiations.

He told reporters that Wolf's response during the Tuesday talks was "tepid" about Republican proposals to privatize the state liquor system and cut public pension benefits.

Wolf wants the severance tax to help boost aid to public schools. He has also proposed increasing personal income taxes, raising and widening the applicability of the sales tax, and bringing in other new revenues. Wolf also wants to lower local school property taxes and to cut some business taxes.