Ritter disputes oil industry claims

Says raising severance taxes won't hike prices

By Gargi Chakrabarty, Rocky Mountain News (Contact), Todd Hartman, Rocky Mountain News

Published August 5, 2008 at 12:05 a.m.

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Photo by Preston Gannaway © The Rocky

A volunteer helps unload boxes of signatures Monday for Petition 126 at the Secretary of State's Office. Voters in November could face the longest list of ballot questions since 1912.

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Gov. Bill Ritter on Monday blasted the oil and gas industry for claiming that a proposed ballot initiative to raise severance tax revenues would hit Coloradans with higher utility bills, steeper pump prices and pit local governments against energy firms.

"I know they can say that, but it's not accurate and it's not fair," he said, referring to the industry's assertions about higher consumer costs.

Ritter, who spoke to the Rocky Mountain News editorial board, backs the initiative, which calls for eliminating an ad valorem tax credit that currently allows energy companies to significantly cut their state severance tax.

At an event downtown later in the day, Ritter said the measure has garnered more than 137,000 signatures from citizens - nearly double the roughly 76,000 needed to get on the November ballot.

If passed by voters, it will raise roughly $321 million a year - with the bulk of the money going to college scholarships.

Ritter cited Colorado's "minuscule" contribution to world oil supplies having no impact on prices in a global market.

As for natural gas, he said it is the transport of gas to markets outside of Colorado via new pipelines that has driven up prices.

"If you really look at pricing in this industry, removal of this subsidy is not something that's going to impact (prices) in a substantive way," Ritter said.

Ritter also criticized industry for saying the measure will prompt energy companies to resist local governments when they want to raise property taxes to fund school districts or other local needs. "Shame on industry if they say they will oppose (school) bonds," he said, adding that energy companies should support local communities in which they operate if they care to be good neighbors.

Ritter said he was the "underdog" in the fight, expecting industry to raise up to $20 million to oppose the measure - compared with the $5 million likely to be spent by its supporters.

He also reiterated his decision not to weaken his administration's move to toughen drilling rules in exchange for industry agreeing to a severance tax hike.

Industry officials worry that the measure would more than double their severance tax burden.

Colorado would rise to become the No. 2 highest taxation state, behind No. 1 Wyoming among the nation's top nine oil- and gas-producing states, according to a study by Jose Luis Alberro, a director at consulting firm LECG LLC. Colorado currently ranks No. 3 for oil taxation and No. 4 for gas taxation.

Higher taxation implies higher costs of production, leading to higher oil and gas prices for customers, said Stan Dempsey of the Colorado Petroleum Association, which paid $50,000 for the study.

"Any time costs are up for any type of business, the effective higher price will be passed on to consumers," Dempsey said.

chakrabartyg@RockyMountainNews.com or 303-954-2976

Flurry of last-minute initiative filings

Colorado voters could face the longest list of issues to make the statewide ballot in almost a century. Not since John Shafroth served as governor 96 years ago has the number of questions promised to cover so much ground. A flurry of last-minute filings Monday brings the total number of possible ballot questions to 19. The record for any single ballot was 32, in 1912. State officials will determine in the next few weeks whether a dozen of this year's proposals received enough valid signatures to be approved for the ballot.

Filed on Monday

* INITIATIVE 76: Just cause

Would require an employer to provide a reason for firing a worker. Number of signatures filed: More than 130,000.

* INITIATIVE 82: Discrimination/ preferential treatment by Colorado governments

A countermeasure to Amendment 46 that outlaws quotas and systems in which job or college applicants earn points based on their race or sex but allows other affirmative-action programs to continue.

Number of signatures filed: More than 115,000.

* INITIATIVE 92: Health coverage for employees

Would require employers with 20 or more workers to provide health care coverage for workers. Number of signatures filed: More than 174,000.

* INITIATIVE 93: Safe workplaces

Would allow an employee to sue for damages in addition to any settlements from the workers compensation system. Number of signatures filed: Almost 155,000.

* INITIATIVE 113: Severance tax

Would reduce energy company tax breaks and use revenue to pay for college scholarships and other programs. Number of signatures filed: More than 137,000.

* INITIATIVE 126: K-12 schools funding

Would lift constitutional limits on state spending and direct additional revenue into an education fund. Number of signatures filed: 164,000.

Pending petitions filed previously

* INITIATIVE 59: Campaign finance curbs

Would bar sole-source government contractors and unions with exclusive bargaining powers from making contributions to political candidates.

* INITIATIVE 74: Corporate fraud

Tougher sanctions for fraud committed by businesses, executives.

* INITIATIVE 120: Severance tax - transportation

Would allocate more severance tax money to transportation.

* INITIATIVE 121: Gaming

Would allow casino towns to vote on whether to increase bet limits to $100 from $5, expand hours of operation and add games.

* INITIATIVE 128: Sales tax for disabled services

Would increase the state sales tax (by 2 cents on every $10) to fund services for those with developmental disabilities.

Already approved for the ballot

* AMENDMENT 46: Colorado Civil Rights Initiative

Prohibits the state from granting preferential treatment to anyone on the basis of race, sex or ethnicity in hiring, education, contracts.

* AMENDMENT 47: Right to work

Would outlaw agreements requiring workers covered by union contracts to pay fees for representation.

* AMENDMENT 48: Definition of person

Would ban abortion by defining personhood as beginning at fertilization.

* AMENDMENT 49: Public payroll standards

A measure that would ban governments from taking deductions directly from employee paychecks for any nongovernmental special interest group.

Referendums

* REFERENDUM L: Would lower the age of a candidate for the Colorado House and Senate from 25 to 21.

* REFERENDUM M: Would eliminate obsolete provisions in the state constitution about land value increases.

* REFERENDUM N: Would eliminate obsolete provisions in the constitution about intoxicating liquor.

* REFERENDUM O: Would increase the number of signatures required on petitions for constitutional amendments to at least 6 percent of votes cast in the previous election for governor.

Not on the ballot

Some of the earlier proposals that proponents either withdrew or did not gather adequate signatures for:

* Allowance for quiet time in which children could pray at the start of each school day.

* Creation of Clean Energy Progress Fund with a fee on global-warming pollution production.

* Legalization of alternative health care providers.

* Increase in the valuation of nonresidential property.

* Mandatory annual cost-of-living increases for all workers.

* Allowance of a parent to excuse a child from public school attendance.

* Creation of a low-income housing fund through a real estate transfer tax.

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Comments

August 5, 2008

6:15 a.m.

Suggest removal

Mike846 writes:

Vote NO on anything that raises taxes in any way, shape or form. Vote NO on anything that increases government involvement in your life.
Vote AGAINST any Democrat in the upcoming elections.
Read the initiatives above. The one's Ritter and the other Dem's are pushing will only hurt Colorado consumers and employers. They care only for their agenda, not the CITIZENS. They've been in charge now for two years. How's that working out?
Only voters can send a message to these idiots. Mike
August 5, 2008

6:27 a.m.

Suggest removal

dukeco1 writes:

"They care only for their agenda"; You're talking about the oil and gas companies, right?

The fact is that Mr. Dempsey is being slightly less than straight forward. Production costs are unrelated to the price of oil and natural gas. Those prices are determined on global and continental markets. Just ask Robert Felmy, chief economist for the American Petroleum Institute, who has publicly said so.
August 5, 2008

6:48 a.m.

Suggest removal

socrates writes:

Mike - that's a fairly ignorant statement. It may be that people don't think the oil and gas industry currently deserves a tax subsidy in light of the record prices their getting for their product. You may want to call that a tax increase, but it's also called corporate welfare.

TABOR said that the people want to have a say on all of these issues. You're saying they don't. I would suggest that people need to do just the opposite and spend a great deal of time studying the panoply of issues put before them this year.

With decisions come responsibility, the people should live up to the responsibility they have requested.
August 5, 2008

7 a.m.

Suggest removal

Joe_Lunchbucket writes:

"Corporate welfare" implies that government has some inherent right to the fruits of your labor — that we belong to government and are allowed by its good graces to keep what we earn. If that's what you believe, go back to California where you'll find fewer and fewer businesses because of just that kind of economic illiteracy. Let's face it, Ritter wants to tax oil and gas because he thinks they have deep pockets and because he thinks those industries are unpopular. Give Ritter about two more years to butcher the goose that laid the golden egg, and we'll be putting Colorado in the same class with Michigan — enduring its own private recession thanks to politicians who don't have an ounce of business or economic common sense.
August 5, 2008

7:20 a.m.

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MrJim writes:

A good rule of thumb, if Ritter is for it, vote AGAINST it.
August 5, 2008

7:35 a.m.

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socrates writes:

Joe - the taxes paid by the extractive industries isn't based on the "fruits of your labor" it's based on the commitment an industry has to the public to compensate for a resource that is "severed" from the ground. The severance tax is payment to the public for something used by a private industry for their financial gain.

Your argument suggests that no one anywhere should pay any taxes. That would be fine if you wanted to create a third world country with no educational system, no system of roads and highways, no clean water and air protections, no economic competitiveness... but it's not the system of government we live in.

Thankfully.
August 5, 2008

7:43 a.m.

Suggest removal

danirobi writes:

I agree MrJim. Ritter doesn't seem to realize that if Colorado were to start mining for shale, the amount of money it would bring to the state.

I love his statement on Mike Rosen yesterday though, classic!
August 5, 2008

9:17 a.m.

Suggest removal

Citizen21 writes:

Ritter is hiding behind the "feel good" scholarship proposal, Initiative 113. It would end a property-tax credit that energy producers now receive, boosting severance tax revenue to the state from natural gas and oil production. THIS IS NOT A GOOD IDEA!

At a time when jobs are key to our state, do you really want to pass a measure that drives an industry to relocate elsewhere? Ritter is just CREATING A TAX. He's already had some measures struck down and reversed do to the fact that they go against TABOR. When is Ritter going to learn?
August 5, 2008

10:11 a.m.

Suggest removal

Lowtaxequalsfreedom writes:

#126 (SAFE) is the largest permanent tax increase in the State of Colorado. Vote NO on #126.
August 5, 2008

11:49 a.m.

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Oliver2 writes:

#126 removes a taxpayer handout to the world's richest industry, at a time of all-time record profits, derived locally from the fact that the producers are now able to export the natural gas out of state, along with most of those bloated profits. This is what has driven up consumer natural gas prices in Colorado, and now--at this time of both record company profits and record consumer prices--to end the taxpayer subsidized pillage of our natural resources, and make sure at least Colorado's share comes back to the state. Enough is enough.
August 5, 2008

12:45 p.m.

Suggest removal

NativeColo writes:

Once again, I am ashamed to be a Colo Democrat and even more ashamed I supported Bill Ritter in the last election. Bill Ritter no longer respects the will of the people who elected him. He is being disingenuous about where Colorado's natural gas goes. Yes, some of Colorado's SURPLUS gas does go out of state. However, the majority stays here. I live in Trinidad and where does our natural gas go--DENVER. I guess we will all pay higher natural gas prices since the State Capitol, admin buildings and Governors' Mansion are all heated by natural gas. The gas produced in Las Animas County is sold to the City of Trinidad. Senior citizens and low income people are already choosing between heat and food. And that was WITH a lower than market price. Because of the rising prices, Pioneer provided funds to help low income people afford their gas rates. If their severance tax doubles, such a subsidy will be a thing of the past. As will school donations, community theatre support and non-profit contributions. Gone will be the funds for snow removal, road maintenance, flight for life assistance and other "good neighbor" acts. This tax will take away gas companies' ability to be a "good neighbor". In all reality, this is not an issue of being a good "neighbor". The gas companies are OUR community members, people we grew up with, live next door to, have known all our lives.

By the way, most local community colleges will not receive any of that scholarship money. The money, according to the CU Alumni Bulletin, (yes, I am a CU alumnus.), has already been earmarked for students, MANY OF WHOM ARE OUT OF STATE RESIDENTS, that attend one of Colorado's major universities at their main campus. That means these scholarships will NOT get to the students who need them the most--students in rural areas, students who have limited means and non-traditional students who attend community colleges or university satellite campuses. Pioneer will pay a lion's share of this tax and Trinidad St Jr. College will end up on the losing end of the stick. Pioneer provides financial support to TSJC for the creation of industry related jobs and industry related education. It's called the Captains in Industry program and it pays for safety courses, engineering programs, well and drilling maintenance, environmental and reclamation practices, leadership courses and computer programs. If Pioneer is no longer able to afford that partnership, that program goes away. In addition, not only does that support go away, TSJC is apparently not getting a piece of the $113 million scholarship pie. Yeah, great plan, Mr. Ritter!
August 5, 2008

12:57 p.m.

Suggest removal

NativeColo writes:

Oh, let me monopolize the discussion just a little more. It seems Bill Ritter is more concerned with out of state people than Colorado's citizens. Sure, save Colorado's deer and elk for out of state hunters who pay huge prices for their hunting tags, not to mention outfitting, food and lodging, while our native hunters who are employed in the gas industry can no longer afford their hunting tags because they are out of work. To go further, put our native Coloradoans out of a job or stuck paying higher natural gas prices so we can provide scholarships for out of state students, (with their money for lift tickets and ski passes), while our own rural students are left out in the cold.
August 6, 2008

5:19 a.m.

Suggest removal

ranchowner1 writes:

Ok. Let's wake up and smell the roses. My neighbor is an oil employee/exec. His bonuses double(!) my entire salary as a school teacher. His vacations and lifestyle are impressive. Jealous? Maybe. But at some point we have to end or deeply lower our dependence on oil! ALL OIL! Come on! I drive a diesel. I know how expensive it is to drive. My kid's school is 35 mins away -one way.. It is going to be painful and hurt our pocketbooks. But wouldn't it be wonderful to get out of the Middle East all together? You go Bill, you are doing the RIGHT thing! The right thing to do isn't the most popular one in most cases... but he has my 100% support and I will let everyone know this is RIGHT! : )
August 6, 2008

5:33 a.m.

Suggest removal

ranchowner1 writes:

ps. I am a native to Colorado. If you want fewer taxes on oil/gas then ride a bike, and get a windmill. Our personal sacrifices due to oil costs have ended numerous child after school activity's. These activities potentially lead to college scholarships. However, if there is more money for scholarships and more of them, then dadgumit I am for it. It is the youth that suffer from the oil dependence. The national debt is theirs, it has become their problem to solve the ones we have created. This is not a “party” problem this is USA problem! Renewable energy is now (or going to be) a major at CSU! I was so thrilled. Let’s work together on getting our dependence on oil down. This is basic economics. Supply/demand! I live in the country the wind blows just about 24-7 we are getting a wind mill to lower our own bills. If it runs accordingly we will become electric everything! Including heat and well water! Think outside the box to get a new solution to a very old problem.
August 13, 2008

10:05 a.m.

Suggest removal

jacka writes:

Amendment 47 affirms employees can't be forced to join the union and pay forced union due just to keep their job. Its simple and its fair.

Amendment 47 text from State website reads:

Be it Enacted by the People of the State of Colorado:
SECTION 1. Article XVIII of the constitution of the state of Colorado is amended BY THE ADDITION OF A NEW SECTION to read:

Section 16. Right to work.

(1) THIS AMENDMENT SHALL BE KNOWN AND MAY BE CITED AS THE "COLORADO RIGHT TO WORK AMENDMENT".

(2)(a) NO PERSON SHALL, AS A CONDITION OF EMPLOYMENT, BE REQUIRED TO:
(I) BE A MEMBER OF A LABOR UNION; AND
(II) PAY ANY DUES, FEES, ASSESSMENTS, OR OTHER CHARGES OF ANY KIND TO A LABOR UNION OR TO ANY CHARITY OR OTHER THIRD PARTY, IN LIEU OF SUCH PAYMENTS.

(2)(b) NOTHING IN THIS SECTION SHALL PREVENT ANY PERSON FROM VOLUNTARILY BELONGING OR VOLUNTARILY PROVIDING FINANCIAL SUPPORT TO A LABOR UNION.

(3) ANY PERSON WHO DIRECTLY OR INDIRECTLY VIOLATES ANY PROVISION OF THIS SECTION COMMITS A MISDEMEANOR AND UPON CONVICTION THEREOF SHALL BE PUNISHED BY A FINE IN AN AMOUNT EQUIVALENT TO THE MOST STRINGENT MISDEMEANOR CLASSIFICATION PROVIDED BY LAW.

(4) THIS SECTION SHALL APPLY TO ALL UNION EMPLOYMENT CONTRACTS ENTERED INTO AFTER THE EFFECTIVE DATE OF THIS SECTION AND SHALL APPLY TO ANY RENEWAL OR EXTENSION OF ANY EXISTING UNION CONTRACT.

(5) AS USED IN THIS SECTION, "LABOR UNION" MEANS ANY ORGANIZATION OF ANY KIND, OR AGENCY OR EMPLOYEE REPRESENTATION COMMITTEE OR ORGANIZATION, THAT EXISTS FOR THE PURPOSE, IN WHOLE OR IN PART, OF DEALING WITH EMPLOYERS CONCERNING WAGES, RATES OF PAY, HOURS OF WORK, OTHER CONDITIONS OF EMPLOYMENT, OR OTHER FORMS OF COMPENSATION; ANY ORGANIZATION THAT EXISTS FOR THE PURPOSE OF COLLECTIVE BARGAINING OR OF DEALING WITH EMPLOYERS CONCERNING GRIEVANCES; AND ANY ORGANIZATION PROVIDING OTHER MUTUAL AID OR PROTECTION IN CONNECTION WITH EMPLOYMENT.

SECTION 2. Effective date. This amendment shall take effect upon proclamation of the vote by the governor.

YES on Amendment 47 for all Coloradans.

Home › Politics › Elections

Ritter disputes oil industry claims

Says raising severance taxes won't hike prices

By Gargi Chakrabarty, Rocky Mountain News (Contact), Todd Hartman, Rocky Mountain News

Published August 5, 2008 at 12:05 a.m.

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