Sunday, February 17, 2008

Severance tax hikes on November ballot? Environmentalists are hoping to force the Colorado General Assembly and Governor Ritter to act on oil and gas severance taxes by introducing a smorgasboard of initiatives for the fall ballot, according to The Aspen Times (free registration required). From the article: Environmentalists introduced four ballot proposals Thursday to increase the taxes paid by the oil and gas industry as they seek to build support for a statewide campaign. The move comes as state lawmakers and the governor are still considering whether to ask voters to increase the state's severance tax this year. The coalition, which includes Trout Unlimited, Environmental Defense, The Wilderness Society and others, wants to use the estimated $200 to $300 million the proposed hikes could generate to boost renewable energy, protect wildlife habitat and help communities impacted by the boom. Joe Neuhof, West Slope field director for the Colorado Environmental Coalition, said some coalition members have been involved in the Capitol discussions about whether to raise Colorado's tax -- the second-lowest in the West -- but wanted to put forward their priorities for how the money should be spent as they continue to talk. "This is a starting point," Neuhof said. "This is where we're at right now and we want to build a coalition and work with other interests in shaping it." Evan Dreyer, a spokesman for Gov. Bill Ritter, said lawmakers have been talking both about whether to change the tax -- including getting rid of a deduction for property tax paid by the industry -- and which of the state's pressing needs, such as health care or higher education, would get money. Dreyer said communities seeing an increase in oil and gas production also need to be considered. Rep. Kathleen Curry, D-Gunnison, said she expects to introduce a severance tax proposal within the next week that could either get rid of the property tax deduction or raise the tax. She didn't see the ballot proposals as a threat to her effort. "I think this just sends a strong signal to us here that people want this addressed," she said. The environmental coalition would have to collect signatures to get a proposal on the ballot this fall, while lawmakers could simply vote to refer a measure to voters... The four ballot proposals include different combinations of getting rid of the current tax exemption for small wells, adding an extra 3 percent tax for all oil and gas wells and setting a new 10 percent tax rate for wells that produce more than $300,000 a year. Some would also bar energy companies from deducting their property tax in calculating the severance tax they owe. According to legislative economists, Colorado's severance tax is the lowest after Utah in the West. Factoring in other taxes, like income taxes paid by companies in those states, Wyoming has the highest effective tax rate at 11.2 percent, compared to 5.7 percent in Colorado. Right now, severance tax revenues are divided between the Department of Natural Resources and the Department of Local Affairs, which gives out some grants to affected cities and counties as well as others not impacted by oil and gas. Category: Denver November 2008 Election 8:21:50 AM

© Copyright 2008 John Orr. Last update: 3/6/08; 5:43:25 AM.