Published in the Daily Review, by James Loewenstein

September 4, 2014

Lt. Gov. Jim Cawley was in Bradford County recently.

On Friday, he spoke to attendees at the Bradford County Republican Committee's annual golf outing, met with the Towanda High School football team to wish them a good season, and attended a fundraiser for the Corbett-Cawley campaign at the Wysox Township home of Bradford County Commissioner Doug McLinko.

On Friday, Cawley also sat down for an interview with The Daily Review, in which he discussed the issue of shrinking gas royalty checks, how the Corbett-Cawley campaign is faring, and the accomplishments of the Corbett administration.

Cawley said that he and Gov. Corbett are very concerned about the shrinking gas royalty checks that many Bradford County landowners are receiving.

"We have made it very clear that we want the practice (of excessive deductions being made from royalty checks for post-production costs) to stop," Cawley said.

However, Gov. Corbett would prefer that a legislative remedy not be necessary to correct the problem, Cawley said.

"Quite frankly, we'd much prefer that the industry as a whole - that all the good companies in the industry, of which there are many - would do some self-policing and call on those that are conducting bad business practices to stop."

However, "if, for whatever reason, the industry either can't or won't police itself, then a legislative remedy is going to be the only thing left to do - and we will pursue that."

As to whether Gov. Corbett would specifically support the enactment of House Bill 1684 at that point, Cawley replied: "I don't know that he (Corbett) has made a comment specifically about House Bill 1684. What I do know is that he is committed to resolving this issue, and if it requires a legislative fix, then that's how it will be fixed."

House Bill 1684, which is sponsored by Reps. Tina Pickett and Matt Baker, seeks to limit the ability of natural gas companies to charge post-production costs to landowners.

If passed, the bill would clarify that the deduction of post-production costs from unconventional wells may not cause royalty payments to drop below the 12.5 percent minimum set by the Guaranteed Minimum Royalty Act in 1979. The bill was tabled in June.

Democratic candidate for governor Tom Wolf has called for a severance tax on gas drilling, which Corbett and Cawley do not support, Cawley said, adding that the revenue from a severance tax would go to Harrisburg.

"When we passed Act 13 under Gov. Corbett's leadership, one of the things that was very important to us is that if there were any local impacts to the communities in which the gas was being extracted, that the industry help to deal with those impacts through an impact fee, the lion's share of which was to remain in the municipalities that were affected," Cawley said. "One of the provisions in the legislation that created the impact fee is that if at any point in the future a severance tax were to be passed by the Legislature (and signed into law), that the impact fee would cease to exist. I think that would have a substantially negative impact on the communities that are currently enjoying the benefits of the impact fee. And it is one of the reasons why the governor and I have not been supportive of a severance tax."

Education spending

The public needs to realize that the $1 billion drop in funding for public schools that occurred in the first year of the Corbett administration was the result of federal stimulus dollars no longer being available, Cawley said.

Cawley explained that the Rendell administration had used one-time federal stimulus dollars to "artificially inflate" the amount that the state was spending on public school education.

The drying up of the federal stimulus dollars resulted in a $1 billion drop in the basic education line item in the state budget, Cawley said, adding that the basic education line item is the primary way that Harrisburg drives money to the state's 500 school districts.

In the three years since then, however, state funding for the basic education line item has increased by a total of $1.45 billion, which has more than made up for the loss of the federal stimulus dollars, Cawley said.

"Right now ... we are spending more on public education in this state than at any time in our history," Cawley said. "Tom Corbett and Jim Cawley are strong advocates for our great public school system in this state. We have provided the resources in order for it to continue to provide a quality education for the children of this commonwealth."

Cawley criticized a poll conducted by Franklin & Marshall College, which was released last week and which showed Corbett trailing Wolf, 49 percent to 24 percent, with 25 percent of the voters still undecided.

"We think that he (Terry Madonna, who conducted the poll) is, quite frankly, asking the wrong people, that he's asking people that unfortunately aren't going to participate in the election this year," Cawley said. "He's using a model in which it was people (who were polled) who had turned out for the national election. There is more participation in national elections than in some others. And that, I think, has produced a skewed result. We view the race as a great deal closer, and we have both empirical evidence of that, and we've got 'the feel' out there.

"The governor and I recognize that we are the underdogs in this race, and we're OK with that, because in our careers it's seldom that we were ever expected to win the races we won," Cawley said.

"We probably spent a lot of time doing our job and not so much time explaining what we were doing," Cawley said. "That's what the campaign is going to be about (in the time remaining before Election Day), and I think that when we do communicate our message of all the things we've been able to do, that we're going to be able to close the gap and surpass our opponents.

"When you consider things like the fact that we've passed four budgets in a row that were balanced, that we eliminated a $4.2 billion deficit (in the state budget that had existed when Corbett took office) without raising taxes, that we took an unemployment rate that we inherited from the previous administration that was 8.2 percent, that is now at 5.7 percent, when you consider the fact that we've worked with the private sector to create over 180,000 new family-sustaining jobs and we are investing more in public education than at any time in our history, I think we've got a great story to tell," Cawley said.

(James Loewenstein,"Lt. Gov. Cawley visits Bradford County," Daily Review, 9/4/14)