We share the enthusiasm local economic development leaders expressed for Gov. Tom Wolf’s plan to provide more funding for blight removal by taxing the Marcellus Shale natural gas industry.
Positioned with Johnstown’s crumbling Conrad Building behind him, the governor on Wednesday pitched his “Restore Pennsylvania” initiative, which he says will help struggling communities with concerns such as blight removal and flood recovery.
That’s if the General Assembly finally approves his plan to join every other natural-gas producing state with a levy on extraction.
In past budget proposals, the governor unsuccessfully pitched a gas tax to fund public education.
This time, he says, the revenue would fall outside the budget and provide “fully funded, non-mandate” help for Johnstown and other towns.
A severance tax would generate $300 million a year, Wolf said – and keep money in Pennsylvania rather than having it leave to help residents in other states.
“We’re already paying to other states, to other countries the tax that we’re actually helping them deal with these very issues – the floods, the blight, the lack of internet access, all the things that we’re helping them pay,” Wolf said. “And they’re not helping us with anything. So I’m simply saying let’s create this tax – a severance tax – that would actually allow other states and other countries to help Pennsylvanians.”
Those on the front lines in the local blight battle are eager to see the governor’s plan become reality.
During a press conference, Cambria County Redevelopment Authority Executive Director Renee Daly said Wolf’s program would “allow for communities across the commonwealth to invest into their neighborhoods and create a safer and more robust region, which will then allow them to attract new residents and businesses.”
Cambria has 1,800 properties listed as blighted, many of them in the city of Johnstown.
“We need stronger action to eliminate blight at a much faster pace,” Johnstown Redevelopment Authority Director Melissa Komar said. “We are hopeful that Gov. Wolf’s new initiative will help to support this effort.”
Republicans have been less enthusiastic about a severance tax – regardless of where the money might be used. They note that Pennsylvania has an impact fee that provides infrastructure funding for regions with drilling activity.
Sen. Wayne Langerholc Jr., R-Richland, from the 35th District, and Rep. Jim Rigby, R-Ferndale, from the 71st Legislative District – whose districts include the blight-filled city – have opposed a severance tax.
We don’t share Wolf’s view that the severance tax really isn’t a tax at all – that the revenue generation gets “folded into the price of the product.”
The cost would be passed along to consumers, as happens with any business-related levy – despite Lt. Gov. John Fetterman’s contention that a severance tax is “as close as you can get to free money.”
However, this tax would simply put Pennsylvania in the same position as Texas, Oklahoma and other gas-producing states that already have the levy.
And we support the use the revenue for community development – including reducing blight, which would have a significant positive impact for Johnstown and the Cambria-Somerset region.
“This is a pool of money that is devoted exclusively to addressing issues that matter clearly to local folks all around Pennsylvania, whether it’s access to the internet, blight, flood mitigation – whatever,” Wolf said. “This is something that’s very different from anything that’s been proposed before.”
The “Restore Pennsylvania” plan has merit but needs the backing of the Legislature.
A severance tax is long overdue, and the Johnstown area sorely needs more help with economic development through blight removal.