Tyler Knott: Thanks for follow up

Advertisement

Thank you for your follow-up article (“Riding the wave,” Sept. 13 Steamboat Today) to a recent story in Steamboat Today that seemed to say property taxes to the county on undeveloped mineral property rights aren’t that valuable to the community. It’s a bit like saying that a vacant lot won’t be more valuable once a home or business is built on it. When a residential or commercial lot sits vacant, the revenue it generates to Routt County or Steamboat Springs is limited. The same is true with dormant minerals. Just sitting in the ground, oil and gas doesn’t generate much revenue. But once the county allows them to come to the surface, the money starts to flow because the county then collects a new property tax on the oil coming out of the ground

Furthermore, whether a property right is worth $1 or $1 million, it’s still a property right. And I was pleased to hear Routt County Assessor Gary Peterson confirm this fact. I was also pleased to hear Commissioner Diane Mitsch Bush agree that Routt County can have balanced oil and gas industry while still protecting other assets.

I thought the first story was disingenuous because it focused on property taxes paid on dormant minerals and failed to mention property taxes on produced oil and gas. I’m glad you went more in depth in the second article to mention the mineral leases bonus, severance tax revenues, sales and use taxes, and energy impact grant monies that Routt County also will receive. Also, as minerals are developed, property tax bases increase because of proven production. 

One more piece of this story is the economic impact to the region that will be felt through trickle down from royalty payments and signing bonuses coming into the private sector. These monies will primarily be spent within the county in community businesses. This will increase the positive economic impact within the region that the county citizens will benefit from directly, as well.

Comments

doug monger 2 years, 3 months ago

Tyler, thanks for the comments, I would clarify that the first article was in relation to SEVERED, not dormant mineral rights(there is no classification for dormant mineral rights). That discussion started and includes the conversation that some people have paid their taxes on these severed mineral rights for over 100 years and hence are not allowed to recoup their taxes or profit on their private property interests. The article was I believe to put into perspective how much the investment of private property interests were in relation to the Severed mineral interests and to the property tax implications as a whole. The second part of the same conversation is that those property owners that still directly own the mineral interests are not charged additional taxes for their mineral interests still owned. The last part and most crucial part of whole conversation is that Routt County needs to have the conversation about is if we have oil and gas, (CONSIDERING TABOR) will we reduce the taxes to the other property tax payers (as required by TABOR) or will we not (through election) and will we have the discussion to "Debruce" like Garfield County so that additional property taxes from energy development will be allowed to build up and or directly deal with the affects of extraction. Taxpayers will have the ability short term to get a free ride from the energy interests and allow other property interests to LIVE OFF of the energy business in a non sustainable situation or we the taxpayers can continue to pay their fair share and the county can Bank and invest the windfall of Energy do deal with the effects and ramnifications of energy. We need to remember that when the energy business goes away, so does their revenue (very much similar to the building boom that we had intermitantly observed during the last 30 years) hence the cliff affect. Doug Monger

0

Scott Wedel 2 years, 3 months ago

Well, it is unlikely that Routt County will ever get enough revenues from mineral rights for it to be a big part of the county's budget. Most of the county simply has the wrong geology because mountains and volcanic activity destroy the shale layer holding the nat gas. Second, Routt County is not a poor county and gets good money property tax money. Garfield County and Routt County have a similar total assessed value on properties, but Routt has only 40% the population of Garfield.

Routt County currently has properties assessed at a total of $1.1 Billion and collects $17 million in property taxes. So even the updated total from mineral activity is tiny compared to the total. It will take years of intense drilling activity before Routt County sees enough money from mineral rights to affect the budget.

As for the "cliff effect" - wells deplete at a fairly predictable rate. Revenues from minerals should be expected to be more stable than our construction industry in a resort town which can be expected to have boom and bust cycles. Coal production should be expected to suddenly end some year. I'm told there are concerns among Twentymile employees because Sage Creek's coal seam is on an incline and is more expensive to produce and they are worried that if it costs too much then it'll be shut down. Hopefully, the county is prepared for Twentymile shutting down at some point. Whenever it is will probably be a surprise.

0

Requires free registration

Posting comments requires a free account and verification.