Apr. 08, 2015

SAXONBURG – The Laborers’ International Union of North America – Mid-Atlantic Region (LiUNA), representing more than 40,000 workers, met Tuesday at the union’s Western Pennsylvania training facility with Speaker of the House Mike Turzai (R-Allegheny) to discuss Pennsylvania's shale industry, jobs and training, and Gov. Tom Wolf’s natural gas severance tax proposal.

“LiUNA is a committed partner to the shale industry and believes we must have policies that support this new and growing industry,” said Dennis Martire, LiUNA vice president and Mid-Atlantic regional manager.  “Only sound policies from our government leaders will encourage the industry to continue to invest and produce at consistent levels that are vital to local communities in the creation of long-term, middle-class job opportunities.”

In 2012, LiUNA members worked 5.7 million hours on large-scale pipeline jobs related to natural gas development in Pennsylvania and West Virginia.

“The governor’s approach on a severance tax is punitive in nature and threatens to severely hurt hard-working Pennsylvania laborers, negatively impact family-sustaining jobs and shut down production and downstream benefits for all Pennsylvanians,” said Turzai. “Gov. Wolf’s misguided approach would create one of the highest severance taxes in the nation, a punishing measure that threatens the future of Pennsylvania’s fledgling energy industry.”

The governor claims his proposal is for a 5 percent tax, but this does not account for the effects of the added 4.7 cents per 1000 cubic feet (mcf) surcharge and a price floor of $2.97/mcf, said Turzai.  Once these add-ons, along with price differentials and other costs are taken into account, the effective rate could rise as high as 35 percent.

“We have already seen a reduction in pipeline man hours over the past two years related to falling gas prices,” said Martire.  “If you excessively tax the shale industry, you risk hurting employers, workers and communities across this state. We need to adequately study the employment impacts of any proposed policy or regulation that could have a negative impact on shale industry jobs in Pennsylvania.”

Supporting more than 240,000 direct and indirect jobs, and accounting for more than 90 percent of Pennsylvania’s job growth, the drilling industry has become a mainstay of the state economy.  

“Rather than attacking this once-in-a-lifetime economic opportunity as the governor’s tax proposal does, we as legislators must find ways to encourage growth statewide and produce more jobs for our working families, including many opportunities in the downstream manufacturing sectors,” said Turzai.

“Shale became a lifesaver and a lifeline for so many of our working families,” said Martire.

The governor’s $33.8 billion budget proposal, which relies on substantial new revenue from the severance tax, was heavily scrutinized during three weeks of testimony before the House Appropriations Committee. Debate on the proposal is expected later this spring.

Representative Mike Turzai
The Speaker
28th Legislative District
Pennsylvania House of Representatives

Media Contact: Jay Ostrich
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