ELN: Severance tax hike defeated, pleasing oil and gas industry
RIFLE — As a Wyoming resident, Grey Wolf drilling worker Jeremy Martinez had no say on a proposed tax increase on the oil and gas industry in Colorado. But he wasn’t worried Tuesday night about the state’s voters possibly threatening his livelihood.
“It would put a speed bump in the road, but I don’t think they’d leave,” Martinez said of energy companies that faced a higher severance tax bill under Amendment 58.
As it turned out, voters rejected the measure, which would have increased annual severance tax revenues by $321 million through means including a tax increase and elimination of a credit against local property taxes.
With 51 percent of statewide precincts reporting, the measure trailed by a margin of 58 percent to 42.
The industry spent millions of dollars opposing the measure, saying it would have resulted in higher costs for utility customers, and when combined with new oil and gas drilling rules in the state could have caused companies to move some operations elsewhere.
As Martinez, a Wyoming resident, nursed a beer at a Rifle bar Tuesday night, he said companies are going to drill where the gas is, and that means remaining in Colorado.
“If there was gas under New York City, we’d be there,” he said.
But North Carolina resident Michael Webb, who works for a firm that conducts seismic tests to locate gas reserves, said there are other places companies can go to drill.
“If they leave the state, we leave the state and go there,” he said.
As for the tax increase proposal, “If it’s going to a good cause, that’s fine. If it’s just going to a senator getting a new toy, no,” Webb said.
The measure would have generated new funds for a number of purposes, but primarily for college scholarships.
Lisa Bracken, who lives in an area of heavy drilling activity south of Silt, said she was disappointed over Amendment 58’s defeat.
“I think the industry has had a free ride long enough,” Bracken said.