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Slim margin favors ending tax credit for drilling firms

By Todd Hartman, Rocky Mountain News

Published October 27, 2008 at 7:48 p.m.

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Amendment 58 Rocky Mountain News/CBS4 poll

Photo by Rocky Mountain News

Amendment 58 Rocky Mountain News/CBS4 poll

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Voters are narrowly favoring a measure that would boost state revenue from oil and gas drilling in one of the most contentious ballot battles of the Colorado election season.

In a Rocky Mountain News/ CBS4 poll taken less than two weeks before Election Day, 49 percent of voters support Amendment 58 and 45 percent say they're opposed - a spread within the poll's 4.38 percent margin of error.

Amendment 58 would kill a tax credit enjoyed by drilling companies and boost state revenue from the industry by some $300 million a year. The proceeds would be directed mostly to college scholarships but also set aside for road projects in areas affected by drilling as well as environmental and renewable energy initiatives.

The measure, backed by Gov. Bill Ritter, a Democrat, and opposed by major oil companies, has grown into the costliest ballot initiative fight in state history, with each side raising more than $15 million.

A pollster who conducted the survey said voters are favoring the measure despite "onerous ballot language" that describes the measure as a tax increase rather than the elimination of an industry subsidy, as proponents would frame it.

"It's frankly stunning," said Lori Weigel, whose firm, Public Opinion Strategies, conducted the survey.

Highly contested

The findings are based on phone interviews with 500 registered voters statewide Tuesday through Thursday of last week. While Weigel's firm generally polls for Republican candidates, Rick Ridder, a Democratic strategist, was consulted on the questionnaire and analysis.

A secondary question also returned good news for Amendment 58 backers, though by a very small margin. It found that 45 percent of voters thought of the measure as ending a "subsidy for wealthy oil and gas companies" while 42 percent saw the proposal as "an energy tax hike passed through to Colorado consumers."

Both frameworks are highly contested. Opponents insist the tax credit has never been a subsidy, while proponents argue that gas and oil companies can't simply pass on the tax in a global market based on supply and demand.

There's "a branding war on Amendment 58 and it's going to come down to the wire," Weigel said.

Despite the seemingly esoteric nature of the measure involving "severance taxes" on fossil fuels taken from underground and business property tax credits, only 7 percent of voters in the poll were undecided.

"Voters are very engaged in this," Ridder said. "They know what they're voting for."

Voters are split along partisan lines, with 67 percent of Democrats and 29 percent of Republicans in favor. It's ahead among unaffiliated voters, at 55 percent in favor, Weigel said.

Perhaps more surprising, she said, is the backing of 50 percent of the voters polled on the Western Slope, a generally more conservative population where much of the state's drilling boom is taking place.

Opposing campaigns

Dan Hopkins, spokesman for the opposition campaign, Coloradans for a Stable Economy, said the group isn't worried. That's because its own polls, as well as an outside poll taken a few weeks ago, show the measure losing.

Conventionally, if you're trying to pass a measure, and you're not over 50 percent a week before the election, "it's unlikely you're going to climb out," he said.

"We believe when people actually consider the magnitude of this tax increase and seriously think about the likelihood of this increase affecting their family budget, they're going to vote no decisively," Hopkins said.

But George Merritt, spokesman for A Smarter Colorado, which is backing 58, said the industry's record profits in 2008 are enough to convince voters that big energy companies don't need a tax break despite "fear-mongering" advertisements about energy price hikes from industry.

"People understand that it doesn't make sense for Colorado to give a $300 million subsidy to an industry that has made billions in profits just since July," Merritt said.

Comments

  • October 27, 2008

    10:27 p.m.

    Suggest removal

    EZBakeOven writes:

    Can next Tuesday come soon enough?

  • October 27, 2008

    10:42 p.m.

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    meebzilla writes:

    I work for an oil company, and even I voted yes on 58 - why should they not have to pay tax on the billion-dollar profits they have been making?

    On another note - I agree with EZBake! Let's get it over with already and get on with our lives!

  • October 27, 2008

    10:59 p.m.

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    NeilC writes:

    Before passing judgment on Amendment 58, it should be noted that new oilfield exploration in Alaska has ceased due to their three successive state tax increases since 2006. And importantly, these decisions were made 'prior' to the recent drop in oil prices.

    Oil companies, like other businesses, have rigorous investment decision making processes. Taxes and subsidies clearly effect the decisions to drill or not to drill, explore or not to explore, and to invest in new untried extraction technologies or not to invest.

    It is entirely possible, if not probable, that a significant decline in oil revenues may be one of the 'unintended consequences' of the passage of Amendment 58.

  • October 27, 2008

    11:45 p.m.

    Suggest removal

    chickenlittle1234 writes:

    NeilC writes - " *

    It is entirely possible, if not probable, that a significant decline in oil revenues may be one of the 'unintended consequences' of the passage of Amendment 58."

    You state this as if it's forever, and it isn't. At some point in the future, should we not be able to wean ourselves off of oil, the price of oil will justify exploration and drilling. In the meantime, we, the citizens of Colorado, get to enjoy the unspoiled beauty of our State without the smear and noise and pollution of drilling mucking it up for at least a few more years.

  • October 28, 2008

    12:20 a.m.

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    jacka writes:

    Xcel already jacks up our rates every month, why should this handout to enviros and rich people already sending their kids to CU pass?

    I don't get it ... money for scholarships to pay for more Ward Churchills??? ... what about construction for more classrooms, what about upgrading the Community Colleges?

    I don't get it ... money for enviroment groups like ELF. We have a pine beetle crisis and these clowns want to hand out money so the enviros can lobby?

    Wake up ... our roads are crap. Rural citizens face shoulderless highways. Rural children on school buses are face danger everyday. Rural commerce and emergency services are hampered because CDOT doesn't have enough snowplows.

  • October 28, 2008

    1:25 a.m.

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    clyde writes:

    The lesson that seems to be ignored in our public schools is that the final consumer (you) pays ALL the costs of bringing a product to market. Raise taxes, raise prices. A business will not sell at a loss. If you want to punish the corporations, you will succeed in only punishing yourself. Why is this concept so beyond the average person's understanding?

  • October 28, 2008

    8:34 a.m.

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    666 writes:

    Ignore all the ignorant mouthpieces that want you to believe that this is a "tax increase" that will "pass through" directly to the average person.

    Colorado has been, for the past few decades, an unparalleled jackpot of a tax dodge for the oil companies...which don't have that much of a presence here anyway. When you consider the fact that 58 brings Colorado in line with pretty much the rest of the nation, as well as the fact that a Colorado produces just a miniscule fraction of the oil market, it is simply not possible for the $300+ million to "pass through" to citizens.

    To summarize, the only people that would feel any pinch at all would be the oil companies...and considering their recent profits, this wouldn't even break the skin, as pinches go. They cannot by any reasonable means justify "passing" the cost "through".

    And the fact that so many people remain willfully ignorant of this and oppose bringing things back in line with where they should be is just sad. They've listened to their platoon leaders, most of whom have a vested interest in keeping the petroleum industry bloated with surplus, and are therefore actually voting AGAINST their best interests.

  • October 28, 2008

    1:41 p.m.

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    goodguy writes:

    What's bizarre is the Rocky would hire Rick Ridder as a polling consultant when he is also a paid consultant for the yes on 58 campaign. Seems like a clear conflict of interest and it was not disclosed in the article.