HARRISBURG — Gov. Tom Wolf on Monday unveiled his plan to fund a dramatic boost in workforce development by adding a tax on natural gas drilling.
The plan for the tax was quickly criticized by Republicans.
"Pennsylvania needs a comprehensive, forward-thinking plan to jumpstart our economy and support our workforce," Wolf said. "Back to Work PA will make strategic and comprehensive investments to build a stronger and more diverse workforce, support Pennsylvania businesses while attracting businesses to the commonwealth, and assist communities with economic recovery efforts — all of which will help us get back on track and build a brighter future for Pennsylvania," he said.
Wolf said his Back to Work PA plan would be funded by an extraction tax on the natural gas industry, which would generate $3 billion to expand existing initiatives and create new, programs to address barriers holding back our workers.
At a budget hearing for the Department of Community and Economic Development Monday afternoon, Republicans bashed the plan, saying the governor’s made the state’s business climate worse than necessary and they think paying for workforce development by taxing the natural gas industry is a non-starter.
State Rep. Keith Greiner (R-Lancaster County) said that the state’s economy was hit harder by the COVID-19 pandemic because Wolf enacted mitigation orders that were stricter than other states.
Secretary of Community and Economic Development Dennis Davin said that it’s wrong to blame the actions of the governor or the Department of Health for business closings.
“The governor’s orders didn’t cause job losses,” he said. “The pandemic did.”
“With all due respect, those shutdowns were onerous,” Greiner said.
State Rep. Tim O’Neal (R-Washington County) said “we can all agree” that the state should try to improve workforce development, but he said he objects to the way Wolf proposes to pay for it.
“I have serious concerns about a natural gas extraction tax,” he said.
Wolf has repeatedly asked the General Assembly to approve a new tax on natural gas drilling without success.
The state’s Independent Fiscal Office said natural gas drilling generated $144.8 million in 2020, though that was a $55 million decrease from 2019, largely due to a drop in gas prices.
O’Neal said that no other state collects an impact fee so the governor’s plan would “double dip” by collecting a tax on top of the impact fee.
Davin said that the governor’s proposal would continue to collect and distribute the impact fee while also collecting the severance tax to fund the workforce development initiative. However, he said that the combined tax rate of the impact fee and the severance tax would still be less than what natural gas drillers pay in most other states.
Wolf’s plan would aim to invest in programs to help workers impacted by pandemic business closings by:
• Helping them retrain and connect to new jobs.
• Expand apprenticeship programs into new areas like health care, child care, information technology and manufacturing.
• Improve workforce development to provide more individualized career coaching and additional help to overcome barriers to employment.
• Increase subsidies for child care and promoting access to child care in areas that are now underserved and considered “child care deserts.”
• And boost efforts to help workers get professional credentials to qualify for in-demand jobs.
John Finnerty reports from the Harrisburg Bureau for The Meadville Tribune and other Pennsylvania newspapers owned by CNHI. Email him at email@example.com and follow him on Twitter @cnhipa.