Senator Art Haywood made the following statement following a joint Finance Committee and Environment Resources Committee hearing on the taxation of shale for education funding:
HARRISBURG, June 2, 2015: “The testimony yesterday at the joint Senate Finance Committee and Environmental Resources Committee hearing further convinced me that a significant severance tax on shale in Pennsylvania is economically and morally justified. Pennsylvania is the only state in the union with shale deposits that does not impose a severance tax and we have the 2nd highest shale deposits in the nation. That’s a mistake. The industry claimed that they are already paying significant taxes. We learned that they pay little to no corporate taxes whatsoever, probably because of legal maneuvering. They are freeloaders, using our schools, universities and more, without paying their fair share.
The drilling industry says to the senate that they are on the verge of collapse. We learned that they tell investors that things are great and will be better in the future than ever before. Are they lying to the senate or to investors? Chesapeake reports a 30% return, Cabot a 80% return, Range Resources a 30% return. They claimed that a tax would cause drilling to relocate to other states or slow capital investment, but who is walking away from a 30% return on investment? No one.
Finally, the industry described funding the schools with a severance tax as ‘exploitation of children.’ Thousands of teachers lost their jobs across the state due to over a billion in funding cuts. Investing in our children is a priority. The freeloader frackers have no shame or moral compass, and they lost credibility at the hearing yesterday. A significant severance tax on shale to fund our schools is affordable – and it’s the right thing to do.”