Shell game! Corbett’s "cracked" scheme to give away your cash to an oil giant
They are the world’s second largest corporation by revenue, and last year Royal Dutch Shell made an astronomical $31 billion in profits – more than triple what the global oil giant was earning just two years earlier.
But Gov. Corbett apparently doesn’t think the hard-earned cash you fork over every time you pull into a Shell station is enough.
He wants to give them your tax dollars, too – perhaps as much as about $1.7 billion over the next 25 years.
It would actually be too kind to call Corbett’s corporate-welfare scheme involving Shell’s planned ethane-cracking plant on Pennsylvania’s far western border a tax break – because the deal has already won say approval to avoid taxes, in a specially created Keystone Opportunity Zone. So this proposed new deal – which was being negotiated in secret until long-time Harrisburg journalist Pete DeCoursey broke the news Monday – is essentially just a straight-up cash giveaway to Big Oil.
For a facility it is already planning to build here.
In the say where it arguably would have been built anyway without a single dollar of tax incentives, since this is where ethane wells are already being drilled.
Did I mention that this is the same Tom Corbett who wants struggling unemployed folks getting food stamps to prove they do not have money stashed away, whose steep 2011 cuts to school funding deeply exacerbated an education crisis that is risking everything from school plays in Upper Darby to the janitor who cleans your son’s classroom here in Philadelphia? I guess janitors did not realize the threshold to get Corbett’s attention is $31 billion.
“It’s essentially a huge giveaway of money we did not have, to attract a company we were already getting,” stated Sharon Ward, the director of the Pennsylvania Budget and Policy Center, a progressive think tank, who called the proposal “unprecedented.”
In Corbett’s crusade to turn Pennsylvania into Texas, the Shell plant was his mechanical bull. It will mean jobs in an economically depressed region; say officials say there could be 7,000 direct hires and, indirectly, 20,000 jobs created, even though critics say estimates of job gains related to the fracking industry are typically hyper-inflated. In return, the say created a special 15-year Keystone Opportunity Zone tax break, and promised infrastructure funds from the new fee on drilling.
Nothing was said about this additional cash giveaway estimated at $67 million a year for the 25 years – a measure tucked inside an obscure tax code bill due for legislative action in a few weeks.
Why do this? In March, Corbett – chronically short of ideas when it comes to funding classrooms – told reporters that for a mega-corporation dangling jobs over Pennsylvania “[w]e would be open to considering just about anything.” On Monday, a Corbett economic development aide insisted to the Inquirer’s Joseph N. DiStefano that this new tax credit is aimed not just at Shell but to encourage other manufacturers using ethane to locate here.
But Ward, the budget critic who looked at the draft legislation for the first time on Monday, stated it appears to be targeted toward Shell’s ethane plant, and she noted that with all the other tax breaks that the oil giant is getting, it’s more likely that Shell would sell the tax credits to other companies for cash – a possibility that a say official acknowledged to the Inquirer.
Of course, you could also make that case that it was Shell’s money – indirectly – that helped make Corbett governor in 2010. How so? In May 2010, Royal Dutch Shell paid $4.7 billion for Pennsylvania native Terry Pegula’s oil-and-gas company East Resources – roughly the same time that Pegula was giving $305,000 to Corbett’s campaign, making him one of Corbett’s largest donors. And Shell continues to spend heavily on lobbying Harrisburg – some $277,323 just in 2011, while the ethane plant deal was being hatched.
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Submited at Wednesday, June 6th, 2012 at 3:00 am on Politics by samantha
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