By: Joe Oglesby
You may be upset at high oil prices and profits, but amendment 58 is not the way to exact revenge. The amendment will hurt the property owners, which is not the oil companies; the amendment will also hurt local governments. “Currently half of the severance tax revenue (approximately $122.5 million in FY 2008-09) goes to the Local Government Severance Tax Fund. Under Amendment 58, only 22 percent of the severance tax revenue would go into the local fund.” The amendment earmarks funds that would go to local governments. The earmark, however, restricts the spending of these funds to environmental protection rather than allowing the local government to spend the money as the community needs it spent.
Over the summer, with the high gas prices, people began to understand that they could get to many places by riding a bike or using public transportation rather than driving their cars. “A result of record energy costs is that Americans have drastically cut back on their driving this year, reducing their gasoline usage at the fastest pace since 1983.” The article cited above also reported that the Federal Highway Administration latest statistics showed that the number of miles driven has dropped the most since 1979.
Colorado currently has higher taxes on oil and gas than Texas, Oklahoma, and Kansas. In oil producing states it has the third highest taxes. The graphs below are from a study that compares oil and gas tax burdens on nine producing states.
In gas producing states it has the fourth highest tax collections.
Under amendment 58 Colorado will move up to the second highest and nearly the highest tax collection. Amendment 58 and initiative 113 are the same; the only difference is that amendment 58 became the official title when it was added to the ballot.
Since Colorado’s taxes on oil and gas are progressive, the taxes will continually grow, as prices for these goods increase. These costs will be passed onto consumers. The temperature is forecasted to be almost 3% colder this winter, across the lower 48 states. Colder temperatures mean higher energy bills. These bills will also be compounded by an increase in taxes directly passed onto the consumer. These increases will not only be in personal energy consumption. Higher energy prices will mean that food transportation costs will go up. All of the higher prices will always fall to the consumer.
Amendment 58 is a tax increase and will directly affect the citizens unlike political ads may lead the people to believe. Removing a subsidy is a tax increase. Colorado, with the subsidy, pays some of the highest taxes. Oil and gas is a business. These businesses will recoup their losses. You will pay more for the oil and gas you need.