Want to Be Governor of Pennsylvania? Steal This Idea from Alaska.

Why not give the windfall from fracking the Marcellus Shale directly to the people of Pennsylvania?

AP Photo | Ron Sachs

AP Photo | Ron Sachs

Hey Allyson Schwartz, if you want to break through and guarantee that you win the Democratic nomination to run for governor, have I got an idea for you. It’s loosely based on the philosophy of Sarah Palin, but don’t let that stop you.

You ready? Here goes. Pennsylvania is sitting on a mother lode of cash, right? The natural gas in the Marcellus Shale reserve is worth at least $2 trillion dollars.

Over the next few months you and the posse of politicians who want to unseat Governor Tom Corbett will claim he gave the oil companies a sweetheart deal for the rights to drill in the state.

You and the rest of the candidates trying to get the Democratic nomination to run against Corbett think the state should be getting more of that money in the form of a severance tax on drillers.

Your campaign estimates that a 5 percent tax would bring in $600 million the first year. But former state secretary of revenue Tom Wolf and Katie McGinty, former head of the state EPA, have also proposed the same 5 percent severance tax and Wolf was on TV first with it. So he has dibs and that’s a big reason he’s ahead of you in the polls. State Treasurer Rob McCord one-upped all of you by proposing a 10 percent tax.

All of you want to use the money for education and other state services and projects. That’s all fine and good, but what about us? Why not separate yourself from the rest of the pack by promising to send checks from the natural gas money directly to us?

Sound preposterous? It’s not.

The Alaska Permanent Fund, established in 1976, gives every man woman and child an annual check for allowing oil companies to drill in their state.

In 2013, every Alaskan got a check for $900. Even infants get a check. Anyone born before the clock struck 12 a.m. on New Year’s Day is eligible. Many Alaskans use the money given to their children to save for college.

It’s not always for $900. Sometimes it’s more. Sometimes it’s less. The money goes into an investment fund that rises and falls with the economy. In 2008, every Alaskan got a check for $2,069, the largest amount ever paid out.

If Alaska can do it, why can’t Pennsylvania?

When oil companies wanted to get into Alaska’s rich oil reserves, the fund was written into the Alaskan constitution. It requires that 25 percent of state oil revenues be put in the fund as payment to future generations of Alaskans who are losing one of their most valuable resources.

Sound familiar?

Congresswoman Schwartz, this is a no-brainer for a candidate for Governor who wants to break away from the pack. Call it the Alaskan solution. Tax the oil companies and every Pennsylvanian gets an annual check.

If you like it, take it and run with it. If not, I’ve got Tom Wolf on line 2.

Follow @LarryMendte on Twitter.

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  • AnyOldHead

    Wolf’s currently my first choice, based solely on ads at this point. Schwartz’s seem maternal & overly emotional, especially when she lowers her voice & sounds like she’s holding back tears. I’m a woman & don’t care for her drama. Wolf seems to tell it like it is, without such embellishment. She seems weak.

  • AlaskaOil

    Respectfully: (1) It’s not “25 percent of state oil revenues” that are put into the Alaska Permanent Fund. Rather, 25% of the State’s 12.5% royalty is deposited into the Permanent Fund; and (2) Alaska is different than Pennsylvania because nearly all of our oil is located on State land (with additional, but fewer, oil leases on Federal and Native land); therefore, the oil is owned by the State, not private land owners. Instead of having wealthy individual land owners like the Clampetts (and so many Texans, etc.), Alaska distributes the royalty revenue equally to all Alaskans via the Permanent Fund. It is a harder model to replicate where the oil is on private land.

    • Larry Mendte

      You are correct. By “state oil revenue,” I meant oil revenue collected by the state. i should have been more accurate. Also, that can be contested too because total oil revenue collected by the stat includes property and sales taxes. As you pointed out, it is just the royalty that pays the money – but it is still 100’s of millions of dollars.

      • Larry Mendte

        By the way, have you seen the size of the reserve, that can’t be primarily under state land

        • AlaskaOil

          Larry, if you’re talking about the size of the reserve in Alaska, yes, it is primarily under state land. True, there are also many billions of barrels of oil under Federal land in the NPR-A, Arctic National Wildlife Refuge (ANWR) and outer continental shelf (OCS), but the overwhelming majority of current (and past) Alaska North Slope oil production is from state-owned land. AK is larger than TX, CA, and MT combined, but “Land in private ownership, other than Native land, comprises less than one percent of the total land in Alaska (source: http://dnr.alaska.gov/mlw/factsht/land_own.pdf).” And, finally, you are correct that “oil revenue” collected by the state includes property taxes (and corporate income taxes); however, it also includes the production tax (or severance tax, same thing), which is the revenue that funds over 90% of state government.

      • bill stephens

        Nice idea but Alaska’s popolation is 732 thousand. PA’s population is 12.7 million. Do the math. We’d each get about 10 bucks based on gas & oil from state owned lands.

  • What they would be giving us is a bill for the cleanup and environmental damage, just the like the coal barons did 50 years ago.

  • Monica Lewinsky’s Abortion

    Allyson Schwartz would get more money out of a 12,5% abortion tax.

  • progressive

    Alaska has no state income tax either, so let’s first reduce the state income tax burden. This could ultimately attract new residents, say from a high tax state like NJ, which would further bolster PA tax revenues…