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Governor Corbett wants $1.7B in tax breaks for Shell

Posted: Jun 07, 2012 10:02 PM BST Updated: Jun 08, 2012 4:18 AM BST

By Dennis Owens – bio | email
HARRISBURG, Pa. (WHTM) -With great fanfare, Governor Tom Corbett announced in March that Shell intends to build a petrochemical plant in Beaver County.

He spoke of the 10,000 construction jobs it would bring just to build the $4 billion facility. He raved about hundreds of good-paying jobs, with an estimated average salary of $70,000, to run the plant. And he beamed at Pennsylvania nosing out competitors Ohio and West Virginia.

Corbett also mentioned it wasn’t a done deal, that Pennsylvania still had work to do to close the deal. But he made clear he wanted to close the deal.

“They have a very small footprint in Pennsylvania,” Corbett spokesman Kevin Harley said enthusiastically. “We want Shell to pay taxes in Pennsylvania. We want Shell to hire Pennsylvanians to work in their petrochemical plant. We want this plant here.”

There was less fanfare or talk about the behind-the-scenes promises made to Shell to entice them into the Commonwealth. Corbett supports a tax credit package worth $1.7 billion over 20 to 25 years. That’s on top of county and school district tax breaks already in the deal since the facility sits in a Keystone Opportunity Zone.

Harley defends the tax breaks to Shell, which reported nearly $31 billion in profits last year.

“Shell could build this in Australia. They could build it in China. They decided to build it in Pennsylvania, so we need to be competitive,” he said.

But the governor needs legislative approval, which may not be easy. On Wednesday, lawmakers got a letter from the governor urging them to support his budget cuts and renewed the call for fiscal prudence. He didn’t mention tax breaks for Shell.

House Democratic leader Frank Dermody, D-Allegheny, said he likes the jobs but needs to further vet the cost.

“At a time when we’re cutting education, we’re cutting K-12, higher education, we’re cutting human services to people with disabilities, our senior citizens, vulnerable citizens, and giving almost $2 billion away to one of the richest corporations in the world, we better take a step back and take a closer look,” Dermody said.

The governor insists there are strings attached to the tax breaks. If Shell doesn’t meet certain production conditions, then it wouldn’t get the tax breaks.

“This will create jobs, which will create additional tax revenue,” Harley said. “The governor wants to expand the pie. A rising tide lifts all boats.”

But tax breaks for a wealthy energy company furthers the perception that Corbett prefers those in the yachts to those in the rowboats.

“It’s not just the perception, it’s the reality,” Dermody said. “The richest corporations in the world get better and he balances the budget on the backs of the working class and the poor.”

The tax breaks are not imminent. They wouldn’t kick in until after the plant is built, which is planned for 2017.

The petrochemcial plant would take Marcellus Shale natural gas and separate the chemicals from it, which then could be used in the manufacture of plastics. It’s estimated thousands of additional jobs would spin off of it.

Harley sees it as a great deal for the state and calls the critics short-sighted.

“Tom Corbett is ushering in a new industrial revolution,” he said.

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