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July 04, 2008 02:12 AM UTC

Energy companies pump millions into effort to ream Colorado taxpayers

  • 38 Comments
  • by: ClubTwitty

( – promoted by Colorado Pols)

From somewhere far away (Houston? Tulsa?) where 70% of the dollars generated from Colorado’s gas drilling boom flow, energy companies are starting to fund the effort to defeat the severance tax ballot initiative.

Colorado’s effective severance tax rate is far lower than all of our neighboring states, many of which have as active or stronger rates of drilling and energy development.  But these big out-of-state companies know what a good thing they are riding on the backs of Coloradans (who watch as both drilling rates and consumer energy prices continue to spike), and they don’t want fairness to get in the way of their record earnings.  

More after the fold…

The Sentinel’s website reports, today, that:

Energy companies give $3.6 million to anti-tax campaign

Oil and gas companies operating in Colorado have donated $3.6 million toward defeating a proposed severance tax increase expected to appear on the 2008 ballot.

A campaign finance report filed this morning shows Chevron Corporation, EnCana Oil and Gas, and Williams Production gave $1 million each to the anti-tax campaign.

Pioneer Natural Resources gave $500,000 to the campaign, and Questar Exploration and Production gave $100,000.

All of the donations, except the $1 million from EnCana Oil and Gas, originated from addresses outside of Colorado.

The proposed ballot measure would eliminate a property tax credit that allows energy companies to write off millions of dollars in the taxes they owe to the state every year.

The report from the Colorado Legislative Council Staff (linked above) shows Colorado’s effective rate at 1.9%, far below Wyoming’s 5.5% and New Mexico’s 6.9%.  Both state’s have booming energy economies–further evidence of the chicken little claims of a dying industry in Colorado brought about by needed regulation updates and this ballot initiative.

Making companies pay their way, as Colorado’s gas flows with the profits out-of-state, would better ensure that taxpayers are not left footing the bill for our crumbling infrastructure, rising social costs, declining air quality, poisoned water wells, and suffering wildlife brought about by the wide-scale and rapidly increasing drilling across Colorado’s gasfields.  

Betting on the often sensible nature of Colorado voters, hopefully the far superior funding pumped into defeating the initiative by the world’s richest industry won’t torpedo it at the polls.    

Colorado's oil and gas severance taxes

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38 thoughts on “Energy companies pump millions into effort to ream Colorado taxpayers

  1. by the energy companies who have been rumored to have $20 million to put into defeating this fairness measure.  Predictably Mesa County–led by conflicted-commissioner Craig Meis–has already come out against it, as has Garfield County, by 2:1, with gas-friendly commissioners Martin and McCown voting to oppose and COGCC member comm. Houpt voting in favor.  Tresi is regularly outvoted–she was on Roan Plateau, in spite of hundreds of county residents turning out to urge the commission to support their municipalities and support protection.  Luckily for the Western Slope, McCown is out this November, but Martin is up for re-election.  He plays the part of the renegade cowboy type that seems able to fool voters into thinking he’s some sort of maverick (heard that before?) but whne push comes to shove he always supports the drillers, voting for mancamps on private property, against additional protections for property owners and public lands, and contrary to the wishes of the Mountain Mayors who more directly represent the majority of citizens in the county.  Here’s hoping that ‘Wyatt’ Martin will get sent back to the (hobby) ranch.

  2. They will see through the lies and misrepresentations put forth by the oil and gas companies.  They are doing just fine in neighboring states, in fact they are actively increasing their drilling.

    Williams recently revised its profits upwards for 2009 and plans to sink in millions of dollars into new capital investment–in spite of the new regulations and potential initiative.  

    Everyone knows how well ExxonMobile is doing, which is also planning to sink  thousands of new wells in the Piceance, even with the new rules and proposed severance tax adjustment.  

    The oilies have lots of money to spread lies its true, but Coloradans are a sensible bunch.  

    1. to promote a similar tax in California. The industry spent $90 million to defeat it. It lost. $20 million in much smaller Colorado is more than the $90M that spread doubt, fear and confusion in the Great Bear Republic. As to Coloradans being that sensible, why did we pass Amendment 2 in 1992 legalizing discrimination against gays and defeat Ref I in 2006 that would have ended it?  My biggest fear is that the language of the initiative, putting money in college scholarships but not directly to higher ed, is confusing and very vulnerable to attack. I hope you’re right, CT, but just am very skeptical of the tax’s chances.

        1. …in every state.  Education? Sure!  The great outdoors?  Sure!  Meanwhile, Bally and I presume others just set up another ka-ching! money machine for themselves.  

          1. And that’s a good thing I think. And yes, the sexy services sell better. So government is becoming marketing driven. I think this will end up being a good thing as it will make government more responsive.

      1. The “enviros” did nto spend $75 million. One man did. Steve Bing, one of California’s resident billionaires, put up the vast majority of the bucks, and proceeded to micromanage the campaign into the ground. Enviros were pulled kicking and screaming into it (many didn’t want to move forward with the proposal at all), and predictably the campaign was a clusterf#$#k from beginning to end.

        With Ritter spending some of his political capital on this one, and a huge turnout in a presidential year (there was nothing else on the ballot in CA when this was on, or very little), we’ve got a good chance. It’s currently polling very well.

  3. But I think politics have changed here in the last few years, less since 2006 than 92 certainly.  But this initiative makes sense for Colorado and I think there will be a great team pushing it.  Glad you’ll be among them!

  4. This is the right idea, yet the wrong way to go.

    I’m not worried the oil industry will leave Colorado, although the small wells in rural areas will be the first to go when revenues fall.  I’m not too concerned about funding educational scholarships with oil taxes, even though I don’t think it is a good idea.

    The property tax credit should go, but at a minimum, the percentages should have been reversed.  60% to the laundry list of impacts and 40% to scholarships.

    It is a shame that authors of these initiatives rarely go through the necessary dialogue and hard work before submitting the language.  

    This will probably pass, but shouldn’t.  

  5. but overall this needs to happen.  With this initiative there will be MORE money for impacted communities even with the 40/60 split.

    1. Because the students in those communities are part of the students getting the scholarships. These scholarships are gigantic for smaller communities because their best chance at a future is kids that get a college degree and move back building up industiries for the future in those communities.

  6. Its more money than is currently coming to impacted communities.  Of course higher ed funding helps all Colorado communities–energy counties and otherwise.

    1. that’s my point.

      $5 million doesn’t go very far spread across impacted areas. Who gets it?  Garfield? Mesa, La Plata, Moffat, Weld, Yuma, Denver? Rifle, Grand Junction, Fort Collins, Meeker, Denver?

      Reading the initiative, the money for impacts is widely distributed to many areas needing more funding to mitigate the concerns you’ve addressed in previous diaries.  

      That’s good – but it seems obvious – higher ed interests recognized an opportunity to get at a funding stream not many people have access to.

      This isn’t a proposed amendment is it?  Or was I reading the wrong initiative?

  7. When pipelines were constructed to send our resouces out of state, they effectively taxed our population by raising our energy rates so that they corresponded with the eastern rates.  It is a very small portion of that raise that is being requested.  How anyone can complain that taxes are being raised, when it is essentially a small return on our additional costs, is beyond me.  We should see who allowed the new pipelines and ask for their logic.  We need to get a business logic.  A logic of sucker is not becoming.  Only a Coloradan on the take would argue to defeat this tax.

    1. into misleading ad campaigns and to defeat this ballot initiative shows how much cash they are now banking on selling Colorado’s gas out of state.

      People will regularly vote against their self interests, unfortunately, especially when well-heeled special interests spend massively on deceptive PR campaigns.  I hope this time they don’t because make no mistake, the oil and gas companies are making so many hundreds of millions of drilling and exporting Colorado’s gas that they have plenty to spend.  

      ExxonMobile has posted the most profits ever of any corporation ever in the history of the world ever.  $1 million, while it might preserve a lot of those worker’s jobs they say they care about (and which really aren’t threatened anyway), ain’t nothing.  The oil and gas companies would much rather spend it on keeping the massive wealth coming their way than in sharing it with their workers or paying their fair share back to the state they are so severely impacting.   They call it business, I call it selfish greed.

  8. The political landscape is littered with the bones of logical initiatives overwhelmed by special interests.

    Heck, just look at all the fools that voted for GW…..  OK, a good vote if you are uber-riche, but not middle class.  

    1. These amendments pass because the public falls for the misnomer ‘right to work’.  Once the businesses start pouring money into the campaign (so far they have not), expect the public to vote in favor of it, dooming themselves to lower paychecks and fewer benefits.

      It takes a lot of money and effort to overcome bad initiatives or support good ones if special interests are against you.

  9.  The state gets more money, just because it can? Because (some) oil companies have money? Because Colorado isn’t yet as evil as its neighbor states? Pathetic.

    Just another money grab by a geedy spendthrift government.

     

    1. Guess the oil industry is already paying idiots to blog on their side.

      Just to take you seriously for one minute, though, here’s the answer to your question:

      The reason why taxing the oil industry more makes sense is because their drilling has expensive impacts on local communities and the state budget (by virtue of the influx of out of state workers, the deterioration of roads, and the added crime and health care loads on local communities). What they pay now doesn’t cover the added costs, and so the taxpayer is effectively subsidizing THEM. That’s unfair, and so the severance tax needs to be raised.

      Get it?

  10. Companies should pay their own way.  Loss of wildlife habitat (hunting generates millions each year); crumbling roads and infrastructure (backlog in the millions–many of the impacts are directly attributable to oil and gas traffic); declining air and water quality (again, its the state–i.e. taxpayers–that often pay for remediation, increased health costs, etc.); and spiking social costs (including the need for more schools).  This is about fairness, making the industry that is causing these direct (and indirect) impacts pay its fair share.

    1. From a recent economic report commissioned by the Associated Governments of NW CO:

      It also suggests that revenues from natural resource extraction will be substantial, but up to a $1.4 billion shortfall may exist for needed capital improvements that would sustain the population necessary to support the energy industry at projected activity levels.

      So Walter, I ask you: what’s the justification for subsidizing the world’s richest industry on the back of Colorado’s taxpayers?

      That’s why we need this ballot initiative.

      1.  The world’s richest industry? I guess you mean aside from government. The oil and gas companies can’t hold a candle to them.

        Yes, I would assume various governments in Colorado will provide services to new residents if they come in to work in the oil and gas fields. I also would assume new residents will be paying state income tax, local and state property taxes, state and local sales taxes, state gasoline tax, occupational ‘privilege’ taxes (where required), automobile license and registration fees, and various and sundry other payments to governments.

        Here’s one point we can probably agree on – companies should pay for the government services they use.

        I doubt severance taxes are really related to government services.  

        1. You can hardly call the government rich, given that they usually operate in the red.  Why?  Because the public and the businesses demand services but refuse to pay enough for them.

          Corporations constantly demand free services and lower taxes at the expense of the taxpayer.  Seriously, 1.9% property tax rate?  That is ridiculous.  

          We either have to pay for infrastructure, environmental damage, schools, etc… now, or pay for it later.  The companies use the infrastructure, they should pay for it.

        2. Whatever you think, believe, doubt, etc. Walter is just your opinion.  The report and numerous other sources indicate quite clearly that the impacts from this industry are far out pacing the current revenue sources coming from it.  That means taxpayers–you, I, Grandma Millie–are subsidizing the world’s richest industry, every year, all the time, as Colorado’s gas gets shipped out of state, along with most of the wealth, driving up local prices too.  

          In addition, those of us living out here in the gas patch get the added benefit of poisoned water wells, an increasingly ugly landscape where the deer and the antelope once played, declining air quality, and trucks regularly careening off the ‘farm-to-market’ roads never built for heavy industrial traffic.

          This needs to happen.  Sadly as several of the posters point out, voters regularly vote against their own self-interests, which these out-of-state profit-bloated companies are again hoping they will.  I hope we won’t.

          1. He will be on this site (and all the others) until exactly Election Day and then will disappear. He is a paid flack for the anti campaign.

            1. We’ll be working this one hard, and hopefully pull off a win.  Facts are on our side, no matter what the Walters of the world try to spin, spin, spin.  

              1. Which initiative is this?  There are multiple severance tax initiatives on the website and I want to make sure I’m reading the correct one.

                1. but now it is identified as initiative 113

                  State taxes shall be increased $321.4 million annually by an amendment to the Colorado Revised Statutes concerning the severance tax on oil and gas extracted in the state, and, in connection therewith, for taxable years commencing on or after January 1, 2009, changing the rate of the tax to 5% of total gross income from the sale of oil and gas extracted in the state when the amount of annual gross income is at least $300,000; eliminating a credit against the severance tax for property taxes paid by oil and gas producers and interest owners; reducing the level of production that qualifies wells for an exemption from the tax; exempting revenues from the tax and related investment income from state and local government spending limits; and requiring specified percentages of the tax revenues to be credited to (1) the severance tax trust fund, (2) the local government severance tax fund, and (3) the severance tax stabilization trust fund, which the measure creates to be used to fund scholarships for Colorado residents attending state colleges and universities, the preservation of native wildlife habitat, enhancements in renewable energy and energy efficiency, transportation projects in counties and municipalities impacted by the severance of oil and gas, and community drinking water and wastewater treatment grants.

    2. Oil is an extraction industry. You move in, you pull out the minerals, you leave. There is no incentive to do anything for the place because it’s a drive-by.

      At the same time, the O&G companies need an educated workforce for a significant percentage of it’s jobs. Our entire educational system exists to provide trained workers for our economy. Without these workers O&G goes out of business.

      Education is a cost of doing business that O&G has pushed off on the state. They take that approach because they’re here to pull the minerals and then leave. So they have no long-term committment. But they do still have the need for the workforce and should pay for that.

  11. “Ignore Walter

    He will be on this site (and all the others) until exactly Election Day and then will disappear. He is a paid flack for the anti campaign.”

    ROTFLMAO

    With the barest minimum of research and curiosity you would have seen I’ve been blogging since ’02. And if you think there’s more money to be made outside of leftwing blogging, well, you have a poor grasp on reality. Occasionally someone (not affiliated with any industry) pays for my website upkeep, for which I’m quite grateful.

      1. http://www.walterindenver.com

        Walter, who pays for your ‘website upkeep’?  Surely its not a secret is it–that would confirm that you are–in fact–a shill.  

        I think BoulderDem’s point was not that you have never been on a blog, but that you suddenly showed up on this one, having never posted a comment until this particular diary showed up.  Spill the beans Walter, come clean man.  What are you hiding?

          1.  Thanks for noticing, ThillyWabbit. My blog has been on the blogroll on the right side of this page for (I think) several years now. As for my blog upkeep, it’s piggybacked on another blog website (roverpundit, now dormant) Every now and again I pay him a little for the service, but haven’t in a while. So there’s the extent of my blogging subsidy.

            I don’t work in politics at all, nor am I paid to write.

            But welcome to all you newbie bloggers :>)

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