Election 2014: Pa. Governor Hopefuls Debate Fracking Tax

  • Pa. Governor Tom Corbett, Democratic challenger Tom Wolf, screenshots of their first debate on September 22, 2014.

September 26, 2014

Fracking took center state during part of the first debate between Pennsylvania's candidates for governor. Republican Incumbent Tom Corbett and Democrat Tom Wolf each answered questions about how the state should tax the oil and gas industry.

Pennsylvania produces more energy than nearly every other state. In the past few years, it’s jumped from seventh to third in the country, behind only Texas and Wyoming. It’s also the only large energy-producing state that doesn’t levy what’s called a severance tax on the oil and gas industry, which has drillers pay on the value of the gas taken from a well.

Governor Tom Corbett opposes a severance tax. At the first gubernatorial debate, held by the Pennsylvania Chamber of Business and Industry in Hershey, Pa., he defended his position.

“We tax that industry. We tax it differently than a lot of other states. We have a higher corporate net income tax then Texas has. We have a personal income tax. Texas doesn’t have an income tax.

And when you’re talking about the industry, you’re not talking just the big corporations, you’re talking the small businesses. Ninety-five percent of the businesses in Pennsylvania I believe are small businesses, that supply the industry. You’re talking about the employees who are getting good salaries.”

Corbett says he also added an impact fee on oil and gas operations, which raised $636 million dollars for the state and local governments. He told the audience of business leaders that Pennsylvania needs to be careful not to overtax its burgeoning energy industry.

His opponent, Democratic businessman Tom Wolf, agrees—to a point. He says when companies take natural resources from Pennsylvania, the state should get a cut of the money they’re making.

“But a five percent severance tax is not a burden. If we do it right, we could make this gas industry a partner with the citizens of Pennsylvania, so that doing this environmentally responsibly, and economically responsibly, we could actually make the game-changer it should be.

We have a God-given resource lying beneath our feet. We need to do everything in our power to make sure this benefits Pennsylvania. And that’s why I’m talking about a severance tax.”

At the debate, Wolf said a five-percent severance tax could raise up to a billion dollars next year, and provide money for public education and other programs.

The candidates will meet for two more debates in the coming weeks.