As we approach another budget cycle in Pennsylvania, we face many of the same challenges as years past. The affordability crisis continues to plague families and the state’s future financial outlook looks grim. In a nutshell, the state is spending more than it is taking in.
Gov. Josh Shapiro and state Democrats are frantically looking for loose change in the couch cushions. Their proposals to raise revenue are all centered in one line of thought – new taxes.
However, Republicans are thinking differently. Over the last year we have made our view very clear – the only way to raise revenue without digging deeper into the pockets of Pennsylvanians is to inject new life into our state’s economy. It’s simple. A growing state economy equals a growth in state revenue.
And how do we do that?
We capitalize on Pennsylvania’s greatest economic advantage: our energy industry.
Even during the delayed budget last year, which was passed 136 days late thanks to the poor leadership of our governor, we were still able to make major strides in unleashing Pennsylvania energy. Republicans successfully fought to end the Regional Greenhouse Gas Initiative (RGGI) in Pennsylvania. Since 2019, the threat of this unconstitutional tax on energy production has driven producers to redirect their business to neighboring states, costing Pennsylvania jobs and leading to increases in utility bills.
Last June, the Independent Fiscal Office, a nonpartisan agency of the General Assembly, published a report showing electricity prices soared an average of 11.4 percent year-over-year for Pennsylvania residents who, at the same time, decreased their home’s consumption by 5.4 percent. RGGI would have further increased utility bills on Pennsylvanians by an average of 30 percent by 2030.
While ending RGGI is a major victory, there is still much to be accomplished. I fear we will see some of the same calls for failed energy policy initiatives when Shapiro takes the stage for this year’s budget address in early February. Shapiro’s Pennsylvania Climate Emissions Reduction Act (PACER) energy plan, yet another cap-and-tax penalty on energy production, is just RGGI wrapped in new packaging.
What Pennsylvania needs, instead, are practical, pro-growth energy policies that prioritize affordability, reliability and job creation. We need an all-of-the-above approach to energy generation, starting with natural gas. Natural gas remains the most affordable and reliable source of energy. And, thankfully, Pennsylvania has it in abundance. Rather than shunning natural gas, we should embrace it as a bridge fuel to the future.
For instance, a few years ago, the Philadelphia Liquid Natural Gas (LNG) Export Task Force released a bipartisan report on building an LNG ocean export terminal in Pennsylvania. A facility like this would expand the market for gas produced in Pennsylvania, incentivize production and help reduce a reliance on Russian energy across the world. All of this would lead to billions in economic investments across the state and downstream effects like the creation of thousands of new jobs.
Since the report, major companies have even expressed interest in building multi-billion-dollar LNG facilities in Pennsylvania. But building and permitting regulations stand in their way, delaying projects for ten years for what in other states would be just a few months turnaround to get shovels in the ground. This is just one example of how Pennsylvania’s outdated bureaucracy is hampering production and holding back critical investments.
Put simply, increasing power generation will unleash our state’s economy. To accomplish this would take permitting reform – reducing the duplicate work performed by both federal and state environmental agencies and shortening the time it takes to approve projects. It requires procuring ready-to-build sites for energy producers and distributors to drive faster and greater investment in our state. And most importantly, it requires a governor who is not hellbent on artificially kneecapping energy producers with politically motivated policy.
PJM Interconnection, the largest power grid operator in the U.S., has predicted over a fifth of its existing power generators, largely coal and natural gas plants, will retire by 2030. If you think that utility bills are out of control now, you can imagine what would happen if this were to come to fruition.
Unleashing Pennsylvanian’s energy industry this budget season will kill the proverbial two birds with one stone. Increased energy production means lower utility bills for consumers AND solving Pennsylvania’s future budget crisis. We can balance a budget in this state without new taxes. I just hope Gov. Josh Shapiro is listening.
Tim O’Neal represents the 48th Legislative District in Washington County and serves as the Republican Whip for the Pennsylvania House of Representatives.