Special Interests Denounce "Special Interests"

HARRISBURG, PA (05.11.10) — The Commonwealth Foundation expressed disappointment today that special interest groups which demand taxpayer subsidies for certain energy companies are attacking Pennsylvania's natural gas companies for simply wanting to be treated like other energy producers.

Citing an analysis that individuals affiliated with the natural gas industry gave $2 million in state campaign contributions over the past 10 years, groups like PennFuture and the Pennsylvania Budget and Policy Center call for a natural gas severance tax to punish this "special interest." A severance tax is an additional tax on top of the many business taxes already paid by these companies.

"These attacks on the natural gas industry by Gov. Rendell and his emissaries only target those who oppose his tax-borrow-and-spend agenda," said Matthew Brouillette, president and CEO of the Commonwealth Foundation.  "Ironically, it is those who benefit from higher taxes and state government's redistribution of wealth who are putting the 'special interest' label on those who merely want to stop government from stepping on their air hose." 

Indeed, the $2 million in contributions given over 10 years is dwarfed by the contributions of the labor unions that run and fund the Keystone Research Center's Pennsylvania Budget and Policy Center. Union PACs gave $27 million in state races in 2007-08 alone and $60 million over the last three election cycles.

PennFuture, the organization started by Secretary of Environmental Protection John Hanger, lobbies legislators and the governor for higher taxes and onerous mandates, while also receiving millions of dollars in taxpayer-funded grants for "alternative energy" purposes.  The organization then uses that money to lobby for even higher taxes and fees and more onerous government mandates.  Since 1999, alternative energy projects have received almost $2 billion in state grants and loans, on top of mandates for utilities to use legislatively-defined sources of alternative energy.

The analysis, prepared by Common Cause PA, also alleges that contributions and lobbying by those tied to the natural gas industry increased as proposals were introduced to impose a tax specific to the industry and limit natural gas drilling in Pennsylvania.

"I am shocked, shocked to learn that an industry would start getting involved in political action when politicians threaten to tax and regulate them," added Brouillette, sarcastically.

Brouillette noted that natural gas companies and employees pay all the same taxes as other companies and individuals in Pennsylvania.  "People working for natural gas companies are simply trying to prevent the government from taking even more of the income they earn from producing clean and affordable energy," he said.  "Furthermore, why should natural gas be treated any differently, tax-wise, than energy produced from wind, solar, or nuclear sources?  These companies are already heavily regulated and held accountable for any environmental or infrastructural damage they may cause.  Simply raising taxes on these companies because Harrisburg politicians need more spending money is bad public policy and will only be harmful to our struggling economy." 

Brouillette also pointed out that 90 percent of the severance tax revenue would be going into the General Fund and not dedicated for the purposes claimed by PennFuture and the Budget and Policy Center.  "This isn't about remediating any problems caused by natural gas drilling -- that's already being taken care of," he noted.  "This tax is to fund Gov. Rendell's preferred special interests -- those who live on taxes rather than produce them."

"If good-government groups like Common Cause PA and the Pennsylvania League of Women Voters truly want to 'get money out of politics,' they need to support reducing the powers of state government that are destroying successful businesses and propping up failing ones.  Why else would businesses be interested in politics?  But what is most disappointing is that two reputable groups are allowing themselves to be used to advance the economically destructive agendas of the real 'special interests' that are harming Pennsylvania's well-being."

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The Commonwealth Foundation (www.CommonwealthFoundation.org) is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.