Governor Tom Wolf did not focus much on the environment during his budget address Wednesday.
Other than a passing reference to clean air and water, the governor of the country’s 5th-largest carbon emitting state did not mention climate change, or a specific attempt to address it, in his speech.
Still, environmental groups are encouraged by Wolf’s proposal, given the economic fall-out of COVID-19.
“It’s one thing to stand up and say, if you were in charge, this is what you would do, but the reality is there’s 253 members of the General Assembly who you need a majority to get on board in each chamber,” said David Masur, executive director of PennEnvironment.
Wolf is proposing mainly flat funding for the departments of Environmental Protection and Conservation and Natural Resources.
Under the plan, DEP would get $167.4 million, compared to the past year’s $158.9 million. It was slated for a significant increase for new staff last year, before the pandemic derailed the plans.
Because of years of cuts to DEP, staff there dropped by 25 percent between 2003 and 2018.
A grand jury report last summer slammed DEP for not being equipped to effectively manage the natural gas industry, allowing harm to people’s health.
“It’s kind of past time that we need to think about funding our agencies so that they can do the basic work of their jobs,” said Ezra Thrush, PennFuture’s director of government affairs. He said he’d like more robust funding for DEP, but doesn’t think Republican leaders are interested in that.
Trust Fund from RGGI and a Severance Tax on Gas
Environmental groups applauded Wolf’s proposal to establish a trust fund using proceeds from participation in the Regional Greenhouse Gas Initiative (RGGI). The Energy Communities Trust Fund would support dislocated workers and communities affected by power plant closures and job losses.
The Wolf Administration plans to join RGGI in 2022 and anticipates raising $300 million in the first year. However, administration officials said they are not counting on revenue from the program for the coming fiscal year. Under RGGI, power plants pay for each ton of carbon dioxide they emit.
Republicans who control the state legislature oppose joining, saying it would hurt coal communities.
Environmentalists also say Wolf’s overall focus on infrastructure and the economy could fit with the Biden Administration’s push for a green stimulus focused on clean energy.
Wolf is once again proposing a severance tax on natural gas — this time to fund economic recovery in a program he’s calling Back to Work PA.
Industry Pushes Back
American Petroleum Institute PA executive director Stephanie Catarino Wissman called the tax “burdensome” and said it would undermine the state’s economic recovery.
Asked whether her group is concerned about a transition to a clean energy economy, she said, “You really can’t have renewables without that reliable backup energy source and that is what natural gas is.”
The Back to Work PA plan is similar to Wolf’s Restore PA proposal from 2019: the state would borrow money to fund programs immediately, then use the severance tax to pay back the loan.
The administration said the effective rate of the proposed severance tax in the 2022-23 fiscal year is 1.88%. Combined with the impact fee, it would be similar to taxes levied in Oklahoma, West Virginia, and Louisiana, an administration spokesperson said. It estimates the tax would raise $3 billion over the next decade.
The severance tax is unlikely to pass, as Republicans have so far refused to consider one.
“The industry pays plenty in business taxes and impact fees now, and any additional tax would harm the industry, the jobs it creates, and the millions of citizens who rely on natural gas to heat their homes,” said House Majority Policy Committee Chairman Rep. Martin Causer (R-McKean). Causer is among the lawmakers who supported Donald Trump’s 2020 election-fraud lie by signing a letter urging members of Congress to object to Pennsylvania’s electoral votes going to Joe Biden.
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This story is produced in partnership with StateImpact Pennsylvania, a collaboration among The Allegheny Front, WPSU, WITF and WHYY to cover the commonwealth's energy economy.