OCR Text |
Show RESOURCES COMMITTEE OPPOSES PROPOSED UTAH SEVERANCE TAX Note The natural resources committee of the Utah Association Asso-ciation of Chambers of Commerce has taken a stand against IIB159, the severance tax measure. It's 11-month study of the state's natural resources has shown that every county shares in the amazing variety and amount of undeveloped natural resources, most of which are marginal economically, and a severance tax certainly will prevent or delay the development of these resources to the detirment of the counties concerned. The following article, from the pen of Utah's Steve Maloney, presents factual arguments against adoption of the severance tax by the Utah Legislature.) Results of eleven months' exhaustive survey of Utah's natural Resources, revealed that every one of Utah's 29 counties share in vast deposits of both metallic and non-metallic non-metallic minerals in amazing variety. The survey, recently re-cently reported, was made by the Bureau of Business and Economic Research of the University of Utah, tinder the direction of Dr. EIRoy Nelson, associate director, and under the sponsorship of the Utah Association of Chambers Cham-bers of commerce. Despite this potential wealth, both the state and the counties may derive no good from it, H. j Wright Volker, secretary of the state resources committee point- j ed out, if the state imposes a sev- i erance tax as proposed in HB i 159. "All of Utah's mineral deposits depos-its are vast, as shown in the state mineral survey," Mr. Volker declared, de-clared, "but the report also shows that all of them are of a marginal nature. That is, the deposits are big in quantity, but small in quality, and as a result when they can be .produced at all or "severed" from the earth, as the tax measure describes it the margin of profit is exceptionally exception-ally small if the finished product is to compete in a highly com petitive market. The addition of a severance tax to the high cost of production would, in most instances, push the operation opera-tion out of consideration by any investor." The survey shows no lack of variety in low grade deposits. Every county in the state is included in-cluded in the list of areas containing con-taining low grade mineral deposits. de-posits. In the southwestern counties of Beaver, Iron, Washington Wash-ington and Kane there are sulphur, sul-phur, nitrates, timber, fluorspar, gold, silver, lead, copper, zinc, iron, halaloysite, alunite, silica, gypsum, uranium and coal. In every instance the deposits are definitely "marginal" and can be produced only at such a cost that only by strictest economy econ-omy of procedure can they be made profitable at present markets mar-kets or those in the foreseeable future. Even the great Utah Copper mine has less than 1 copper and is profitable only because be-cause of special methods of operation op-eration discovered after the process of working is begun. If the present severance tax proposal pro-posal was effective when D. C. Jackling, against all advice, began be-gan operations at Bingham, he probably would not have dared to begin mining yet the property prop-erty pays Salt Lake County more than a million a year in taxes and other millions in state taxes and payrolls. "The situation is the same in practically every county," Mr. Volker declared. "Their natural resources in most instances are not worth one cent to the counties coun-ties or the people of the counties, coun-ties, because they are not being worked. They become valuable only after they have been removed re-moved or severed from the ground, and are processed. For instance, one piece of mining equipment manufactured in Utah is sold for $2750, but the raw materials were worth only $2.75. The labor cost was $1800. But there the taxes were levied and possible only when the resources became valuable. The minerals I were worthless in the ground, and could not be removed if high taxes made the Utah resource re-source unable to compete with the same material from other sources." To provide the stimulus for the development of the natural resources within each county according to Mr. Volker, it will be necessary to obtain defeat of HB 159 to allow free access to the hidden wealth of the state To accomplish this it is necessary neces-sary for each county to weigh the measure against potential wealth of the country, its future payrolls and its economic and industrial development. |