This initiative will eliminate a severance tax credit that was granted to the Oil & Gas Industry back when gas prices were very low. The increased revenue will mostly be directed to college scholarships for Colorado residents attending state colleges and universities – as well as 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.
Further info at Colorado Ballot – The Severance Taxes on the Oil and Natural Gas Industry Initiative.
Amendment 58 eliminates a state tax credit for an industry that is currently experiencing record profits. Better uses exist for state dollars than this credit. Amendment 58 directs the new money to state and community programs that help improve the state’s economy, environment, and infrastructure. These programs are a sound investment in Colorado’s future.
Increasing access to college for middle- and low-income Coloradans is critical to ensuring the state’s long-term economic health. The scholarships funded through this measure offset the high cost of college, making a college education attainable for more residents. As Colorado graduates more state residents, businesses benefit from a larger pool of educated workers that can help grow Colorado’s economy.
Oil and gas production is necessarily limited by the location of reserves. Raising the extraction cost of those resources is not likely to have much of an effect on production in Colorado. Colorado currently has the lowest severance tax rate among large-producing western states. By eliminating the state tax credit and tightening the small-well tax exemption, Amendment 58 increases the compensation that Colorado citizens receive for the extraction of natural resources and brings Colorado’s tax rate more in line with other states.
The money raised by Amendment 58 provides benefits to the state with little or no increase in the cost of energy for Colorado consumers. Oil and gas prices are influenced by numerous factors, and a change in Colorado’s severance tax is not a large enough factor to make a significant difference in Colorado’s prices. Colorado produces less than one-tenth of one percent of the world’s oil. Increasing the state’s severance tax on this level of production is unlikely to affect the market price of gasoline. Likewise, since most of the natural gas produced in Colorado is sold elsewhere, any additional costs are likely to be paid by consumers outside of Colorado.
There is a list of arguments against this proposal but they are all such utter self-serving B.S. that I will not repeat them here. It’s all FUD (Fear, Uncertainty, & Doubt).
The latest argument against this from the Oil & Gas industry is:
Another campaign official, Rick Reiter, was far harsher, calling the plan a “handout” that would only provide most students with “weekend beer money.”
This amendment is where we see if an eminently fair and sensible amendment can be defeated by overwhelming spending by a special interest group trying to continue their free ride.
The severance taxes in Colorado are lower than they are in Wyoming – and Wyoming is not an anti-oil liberal haven. At the same time, oil profits are in the stratosphere and they are drilling with every rig they can find.
We would love it if there was no taxes on the people creating this site. We all would prefer that everyone else is taxed, but we are not – so we get the benefits of government without paying for the costs. The oil companies are no different.
At the same time, a college education is critical for each resident to have a good job and be a strong contributor to our state. Yet Higher-Ed funding is so tight that many students must forgo College because they cannot afford it. This is sentencing them to a life of economic poverty.
Excessive Oil company profits created on the backs of residents forced to live a life of economic poverty is wrong. The oil companies will spend over 10 million to try and continue their free ride. A yes vote will right this wrong.