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Show Severance fan a necessity? During the 1981 State Legislative Session, Ses-sion, a severance tax bill was proposed but failed passage. The bill was designed to tax non-renewable natural resource commodities, com-modities, particularly coal, that are exported export-ed from the state. Revenues from the severance tax would theoretically then be used to mitigate growth impacts caused by mining of the natural resource. High on the list of projects to be financed would be sewers, water systems, roads, public safety, etc. Of question during the next session will no doubt be a similar severance tax bill and the hard question will be not whether the state wants a severance tax, or not, but how the tax revenue derived will be distributed. Local elected officials in whose juris -diction the impact occur, are in the best position to determine what impact mitigation miti-gation projects should be funded and in ' what priority. The risk, however, is that the state I and particularly the Wasatch Front, interests in-terests will attempt to dissipate the severance sev-erance tax revenue In non mitigating areas such as the general fund or ottieFstate wide project having little relationship to im -j pact areas. We would see the same thing j in any MX funding if the legislative chan- nels are not designed to give the decision options to local elected officials, j , To avoid boomtown effects, a severance tax is necessary but the funds derived should be allocated heavily in favor of local jurisdictions with local prioritization and decision making of primary concern. If Wasatch Front Lobbyists have their way, I energy from Southern Utah will be extracted extract-ed and they will get the benefit from a severance tax, while local communities and counties will be left holding the bag. Let's not let hist' -y repeat itself. The streets of Salt Lake City are paved with the profits of early mining ventures of Southern Utah. But the streets in Beaver County were paved by local taxpayers long after the mines were closed. Certainly industry should pay its own way just as should every segment of society. But industry should not be unfairly burdened, with social Impacts beyond that which is directly associated with their operation. The problem with severance tax on any but a local level is that legislators soon look at them as windfall taxes. The same can be true with leasing of public lands. All too often the end does not justify the means. For instance Alaska has become so rich with oil and gas royalties from Prudoe Bay, that Alaskan residents pay no income tax or property tax and most receive cash payments from the state on an annual basis. It's downright ignorant to believe that you can make industry pay the bill. All industrial costs of doing business, including taxes of all kinds must be passed on to the final consumer. con-sumer. Eventually that is the dogthat bites the hand that feeds it. And sooner or later the well runs dry, the ore runs out, or the excess taxes make it uneconomical to continue. When that happens, everybody who bellied up to the bar for a free drink must finally pay the bill. But suddenly, there is nothing to pay with because the paycheck dried up along with the industry. Severance taxes, mitigation funds or what ever you call them can be a real bonus, if handled correctly, to mitigate direct ' impacts. This can best be done by using the local option, and keeping the politicians and metropolitan areas hands out of local pockets. |
