Fierce fight over tax on Colorado oil, gas industry |

Fierce fight over tax on Colorado oil, gas industry

ASPEN, Colorado “-A Colorado ballot issue that would increase tax revenues paid by the oil and gas industry in the state is being championed by Gov. Bill Ritter and conservation groups as fair play.

Critics claim the proposal flirts with disaster.

The ballot measure, Amendment 58, would eliminate a tax credit for oil and gas companies. Doing so would raise an extra $320 million in revenues for Colorado by 2010.

The new revenues would be channeled to four programs: 60 percent would go to college scholarships for Colorado residents; 15 percent would go to purchasing wildlife habitat; 15 percent would go to local communities for road and water infrastructure projects; and 10 percent would be invested in renewable energy projects.

The sides battling over the issues couch Amendment 58 in very different terms. Proponents go for sentiments against big oil companies. A Smarter Colorado, a group promoting passage, says the amendment will end a “subsidy” for an industry raking in record profits. In fact, it cuts the tax credit that the state has long awarded the industry.

Opponents are trying to feed on sentiments against taxes and fears about the weakened economy. Coloradans for a Stable Economy claims that eliminating the current credit would raise the cost of producing oil and gas in the state and get passed on to consumers. They also contend that the higher tax will drive business from Colorado.

So who is a voter to believe? One claim by the opponents was debunked recently through a thorough study of oil and gas issues in the West by a respected nonpartisan, nonprofit organization called Headwaters Economics. It found no evidence to support the warning that the oil and gas industry would pull out of Colorado because of a higher tax rate. The industry goes where the resources are available.

George Merritt, spokesman for A Smarter Colorado, the group supporting passage, also noted that neighboring states already have higher tax rates on oil and gas than Colorado’s 6.2 percent. Wyoming is at 15.9 percent; New Mexico is at 15 percent and Utah is at 12.1 percent.

Merritt contends that Amendment 58 opponents are full of baloney with the claim that higher taxes will mean higher prices for consumers. It is preposterous to think that taxes in Colorado can influence “macro-economic” issues like prices at the gas pump or natural gas for homes, he claimed. Merritt charged that is a “scare tactic” being waged by a political action committee funded by the oil and gas industry.

Dan Hopkins, spokesman for Coloradans for a Stable Economy, didn’t respond to a request for an interview.

In the Roaring Fork Valley, reaction to Amendment 58 is split among two organizations keenly following oil and gas issues. The Garfield County commissioners voted 2-1 to oppose Amendment 58. Wilderness Workshop, the valley’s oldest conservation group, supports it. Garfield County has been a hotbed of natural gas extraction this decade. Wilderness Workshop is battling to keep gas exploration out of roadless areas and other sensitive public lands.

Garfield County Commissioner John Martin said he and colleague Larry McCown opposed Amendment 58. Tresi Houpt supported it. Martin said part of the opposition stems from concerns that revenues for the county could drop. Garfield County gets tax revenues from three oil and gas sources ” an existing severance tax paid to companies; local property taxes and a “head tax” based on workers employed in oil and gas firms in the country.

Garfield County staff researched how the proposed formula in Amendment 58 would have affected the county’s revenues over the last five years, then compared that to actual tax receipts. The result, Martin claimed, was a “significant” annual loss. (Merritt claimed that it is impossible; counties affected by oil and gas extraction would get increased, not decreased, revenues from passage of the amendment.)

Martin, a Republican, said he also opposes the measure because he believes higher taxes on the industry will be passed on to consumers.

“It’s good intentions,” he said of Amendment 58. It just wasn’t written well, he said.

Wilderness Workshop gave a strong and succinct endorsement of Amendment 58 in a recent e-mail blast to its members. “By voting YES on 58 you will make the common-sense decision to stop giving the wealthiest companies in the world huge tax breaks in Colorado,” the conservation group said.

For more information from two of the primary groups in the fight, go to to see the case of proponents and for opponents.

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