The governor misspeaks when he pays homage to his favorite state in the union... Texas.
Gov. Corbett has made no secret of his desire to put on a cowboy hat and be more like the Lone Star State, after all one of his first actions as governor was to board a plane and party with Range Resources at this year's Super Bowl.
What the governor hasn't done is research any of Texas' policies and regulations before he speaks about them.
As earlier blog posts have enumerated, in addition to having a severance tax on natural gas drilling, a tax on mineral rights and having closed the Delaware loophole a few years ago, Texas, unbeknownst to Gov. Corbett, levies a property tax. A property tax that as Michael Woods of the Pennsylvania Budget and Policy Center pointed out last week, was worth $40 billion in 2009 according to the Texas Comptroller. It comprises nearly 50% of all tax revenue generated in the state.
The math works out to more than $2 billion generated from the property tax on natural gas assets in 2009 (assets tapped and untapped) for TX, in PA that same property garners zero income for the state. Pennsylvania does have a corporate net income tax, however 85% of oil and gas corporations that filed CNI tax returns paid nothing.
As the governor has pointed out tax policies between the states don't allow for exact apples to apples comparisons, but we do know natural gas companies pay their share of taxes in Texas (and other natural gas states). There has been no mass exodus of drillers out of Texas to go where they can frack for free, which incidentally is only in PA.
Despite the differences in policy, one conclusion can be drawn: natural gas drillers do better in the Keystone State than the Lone Star State because the Commonwealth fails to tax them.
