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Chamber to oppose killing energy credit

Plan would hike state revenue from oil, gas drilling

Gargi Chakrabarty

Published June 12, 2008 at 12:07 p.m.

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The Denver Metro Chamber of Commerce, representing more than 3,000 businesses mostly on the Front Range, voted to oppose a ballot proposal to increase state revenues from oil and gas drilling.

The proposal, backed by Gov. Bill Ritter, calls for eliminating a property tax credit that allows energy companies to significantly cut their state severance tax.

No other state offers such a benefit to the industry.

The proposal would mostly affect oil and gas companies operating in Weld, Garfield, Rio Blanco, Mesa, Yuma and La Plata counties. If passed by Colorado voters in November, it would raise roughly $200 million a year - with the bulk of the money going to college scholarships.

"We had a very thorough, respectful discussion on the merits of the severance tax proposal," said Chamber President Joe Blake. "It was a difficult vote for many people because it pitted an industry that's important to Colorado, certainly at this time, against higher education that is one of the most important pillars for Colorado."

Chamber spokeswoman Kate Horle said oil and gas companies likely account for less than 5 percent of the total membership.

A majority of the chamber's 55-member board present were asked to choose from three options: Support, oppose, or take a neutral position. A majority of those voting chose to oppose, although a source familiar with the outcome said the vote was close.

George Merritt, spokesman for A Smarter Colorado, the campaign supporting the proposal, said the close vote shows "there are businesses that have loyalty to oil and gas companies and businesses that appreciate the fact that higher education is very important for their companies."

Supporters also point out that the total tax burden on the oil and gas industry in Colorado is far lower than in most neighboring states like New Mexico or Wyoming.

"I don't think it makes sense to give oil and gas companies a $300 million subsidy," Merritt added.

Joe Lehman, director of government affairs at Lockheed Martin, which is a chamber member, said, "The governor has made clear what he is trying to accomplish. We certainly concur that Colorado needs an educated work force to have the kind of industry and jobs that are stable and sustainable."

Blake said the chamber's vote reflected uncertainties about the proposal. Would full-time or part-time students be eligible for the scholarships? How would it help the needs of cash-strapped colleges and universities? How would the scholarship be administered?

"A number of people said they were concerned that one industry had been singled out to provide funding for addressing the need for scholarships," Blake said. "We always had a problem with that."

Last month, the Colorado Competitive Council or C3, affiliated with the Denver Chamber, voted to fight the proposal on similar grounds.

chakrabartyg@RockyMountainNews.com or 303-954-2976

Comments

  • June 12, 2008

    2:27 p.m.

    Suggest removal

    jacka writes:

    Payback to the Governor, Hickenlooper, DNC and Democrat money machine for selling labor peace, opposing worker choice, and disenfranchising voters.

  • June 18, 2008

    11:16 a.m.

    Suggest removal

    orangecrush989 writes:

    For continued economic growth, Coloradans should support ending the subsidies for oil and gas companies. This will not raise gas prices. We are the only state that actually subsidizes oil and gas. There are no negative externalities attached to higher education. This bill will actually increase money to local governments affected by oil and gas by five million ($93M to $98M). Don't be a pawn of oil and gas. $200 Million a year is the Exxon CEO's salary. Also, 95% of all wells wont be taxed because they pump less than 15 barrels a day, so it won't hurt small drillers. Lets improve Colorado's future