There He Goes Again

If he has his way, Pennsylvania Governor Tom Corbett--he who refuses to impose a severance tax on multi-billion-dollar natural gas companies--is about to impose a huge severance tax on ordinary Pennsylvanians.

A severance tax is a tax on the use of public resources. In the case of natural gas extraction, for each unit of gas taken (or severed) from Pennsylvania's lands, the gas company pays a marginal tax.

Corbett (and the Republican-controlled State Senate) won't impose such a tax. They claim it would drive industry away. Forget the fact that every other state in the Union that possesses shale gas formations, including tax-averse Texas, imposes such a tax. Forget, too, that the gas companies are limited in where they can drill; there's no shale gas underneath Rhode Island, so drilling there would be like fishing for lobster in Arkansas. Facts be damned, Corbett, his campaign coffers swelled by industry dollars, has stood firm against a severance tax.

At the same time, Corbett's proposed budget would slash funding for public education at every level, from K-12 through college. The results of these proposed cuts would be catastrophic (I just read that the Duquesne public school district might close entirely), but that's Corbett and the Republican party: cut taxes, slash budgets and public services, and boost industry, and we'll live in a utopia.

But the thing is, such a program does not cut taxes. It raises them. In the case of Pennsylvania's public colleges and universities, Corbett's budget proposes a roughly 50% cut in state funding. The result, inevitably, is that public education in Pennsylvania will become more costly; the schools will have no choice but to raise tuition (or, what is in essence the same thing, to drastically cut services, which students will then have to pay for themselves). Thus the budget cuts effectively impose a severance tax: for each unit of education taken (or severed) from the public system, students and their families will have to pay an increased amount. To finance this additional tax burden, especially in these days of cuts to federal and state grant money, they'll have to take on the additional tax burden of bank loans. Or, what is equally likely, they'll have to forego college altogether.

You'll tell me this isn't about taxes. But it is. Pay now or pay later, services in a society cost money; you can either pay for those services through direct taxes of one sort or another, shared (in theory) equitably by the society that benefits from the services, or you can pay for them through higher costs. From the perspective of the taxpayer/consumer, what's the difference?

Corbett, in short, is not opposed to raising taxes. Rather, like all Republicans, he simply wishes to shift the burden of taxation from those most able to afford it--the corporate and the wealthy--to those least able to afford it: the middle classes and the poor. Thus the social benefits of public services, whether they be gas or education, will be disproportionately enjoyed by the rich, while the social costs (not only in terms of dollars but, as with gas extraction, in terms of environmental impacts) will be disproportionately borne by the poor.

But there's a bright side to all this. I'm sure all those kids who can't afford school can find really good jobs working on natural gas rigs.