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Corbett's Shell Oil Tax Break Gets Support

Gov. Tom Corbett and allies from labor groups, business associations and state and local government make the case for a $1.65 billion tax break for Shell to locate a plant in Pennsylvania.

By Eric Boehm | PA Independent

HARRISBURG — Business groups, union leaders and representatives of state and local government have thrown their support behind a plan to provide Shell Oil with a $1.65 billion tax credit as part of the state budget agreement.

What do you think of the deal? and add your comments below.

Gov. Tom Corbett assembled this coalition Wednesday at the state capitol as part of an ongoing effort by the administration to land an ethane cracker plant in Washington County. The plant would use natural gas to produce petrochemical products and could create 20,000 jobs.

The Keystone State is battling with Ohio and West Virginia to land the facility.

The unity displayed by groups that normally oppose each other in state politics was important, said Corbett.

Even across party lines, even across the lines of labor and business, we all understand that this is an opportunity for the future of our state,” Corbett said. “And it’s not an opportunity that comes along very often.”

A crucial piece of the puzzle is the passage of a special tax credit for ethane, which would be capped at $66 million annually and could give Shell a $1.65 billion tax break over 25 years.

Pennsylvania’s corporate income tax is 9.99 percent, the highest in the nation. Combined with the United States’ corporate income tax, Pennsylvania has the highest taxes on businesses in the world.

Gene Barr, president of business advocates Pennsylvania Chamber of Business and Industry, said the tax break would balance out those economic hurdles, and he encouraged the deal to be part of an overhaul of Pennsylvania’s business climate.

We need to move forward, because we’re going to make products that this country and this world need, and we’re going to create careers for our people here in Pennsylvania,” Barr said.

John DeFazio, director of the United Steelworkers District 10, a sector of the largest manufacturing union in North America, said the ethane plant might be “the opportunity of 10 lifetimes” that Pennsylvania could not pass up.

But not everyone is on board with Corbett’s tax break proposal.

Sharon Ward, executive director of the Pennsylvania Budget and Policy Center, a liberal think tank here, said lawmakers should question a tax break to the world’s second largest company.

“Shell’s parent company had $20 billion in profit in 2010, up 60 percent from the year before,” she said. “The question for lawmakers should be why is Pennsylvania providing any subsidy to this project at all?”

Corbett and others defended the tax credit as being for more than just one company, and ensured that the legislation would not allow for any tax breaks unless jobs were created and other production benchmarks were hit.

We’re not giving anything away,” said Allegheny County Executive Rich Fitzgerald . “It’s almost like hiring a sales representative and paying them only on commission on the sales they make, not giving them the money up front.”

The tax credits would not start until 2017, so this year’s budget would not be affected, Corbett said.

Asked if low taxes for all companies would be better rather than tax breaks for a single corporation, Corbett said those other companies were not coming into the state.

If other large companies came to the state looking for similar arrangements to provide thousands of jobs, he would consider it and the General Assembly should as well.

That’s not a Republican or Democratic goal. It’s good policy; it’s good politics,” he said.

Frightwingslayer June 26, 2012 at 03:47 PM
Ok mr. Moron, What did Rendell give to Olympus? Doubt you know how much..You just love to spout off. You idiots gotta stop watching Fox news and enter the real world. Some Unions are supporting the Corbett move..Doesn't that scare the heck out of your teabagging butt?
Liberalism is a mental disorder June 26, 2012 at 07:57 PM
Olympus is a Keystone Opportunity Zone. Go look it up Crap for Brains Liberal. Of course Unions are supporting Corbetts move. It will bring jobs to Pa. These are not useless public unions though... put rather the trades, people who need the private sector for job. Now go play with a sharp knife...
Indian Valley Patcher June 27, 2012 at 07:32 PM
Unfortunately for some posters, it is important to watch what links you post and what you quote as facts. The individual (won't state his/her user name since, it is disrespectful to insightful debate) posted the patch article needs to note that it was written a local Republican Senator. It is important for the integrity of your argument to site unbiased sources to substantiate your point of view. In this case, you are incorrect in stating that the Governor has a better record on school budgeting than previous administrations. Especially when it comes to higher education funding. It is important that we all be more critical of the information we use to help us understand the issues that face us today. Look at it from many perspectives and then you should find the truth somewhere in the middle.
Joe June 27, 2012 at 08:02 PM
I asked Todd Stephens (R) about the education budget, more precisely the PSER's account. The pension has been neglected by previous administrations (both R&D) that this Governor has decided to face the music, and try to fully fund the Pensions. We see this in some reduced funding going directly to education and being directed to this account. We also see this in our school taxes, as the Commonwealth is requiring higher contributions by school districts. I believe the TOTAL $$$ going to education is as high or higher than the preious administraion.
jordam smith July 01, 2012 at 01:55 AM
my best friend's aunt makes $70 hourly on the computer. She has been out of a job for 6 months but last month her payment was $19766 just working on the computer for a few hours. Go to this web site and read more Lazypay10.com

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