In guest op-ed, Greeley Tribune allowed GOP lawmaker to make unsubstantiated and inaccurate claims about mill levy freeze, energy

Summary: In a Greeley Tribune guest opinion column, Republican state Sen. Scott W. Renfroe dubiously claimed that "rais[ing] taxes on the energy business" would lead to "fewer jobs and less production." Renfroe neglected to note that energy companies reportedly pay a comparatively low effective rate in Colorado because of a "substantial property tax exemption." He also repeated distortions of Colorado's mill levy freeze, calling it "an illegal tax increase" and falsely asserting that it "brought in" additional funds to the state treasury.

On April 9 the Greeley Tribune published on its website a guest column in which state Sen. Scott W. Renfroe (R-Greeley) made the unsubstantiated claim that "if you raise taxes on the energy business, we will ultimately have fewer jobs and less production." The column did not mention that according to a December 10, 2007, Rocky Mountain News article, "the overall tax burden for oil and gas companies in Colorado is 5.7 percent of production" compared with overall oil and gas tax rates of 11.2 percent and 9.4 percent, respectively, in the neighboring "energy rich" states of Wyoming and New Mexico.

Further, Renfroe misrepresented the mill levy freeze enacted in May 2007 as Senate Bill 199 by stating that it "brought in an additional $118 million" that "was not spent on education." However, as Colorado Media Matters has noted, SB 199 amended the Public School Finance Act of 1994 so that beginning this year many local communities will pay a greater share of public education financing, but the measure does not impact the amount of state tax collections or refunds. Moreover, contrary to Renfroe's assertion, the measure included detailed increases for state spending on local education.

From state Sen. Scott W. Renfroe's guest column "Higher taxes will mean fewer jobs," published April 9 on the Greeley Tribune's website:

Last year the Democrats, led by our governor, created an illegal tax increase by freezing the mill levy on property taxes. This increase brought in an additional $118 million. This increased tax revenue was not spent on education. For our liberal lawmakers to now attack the one industry keeping the state's economy afloat is illogical and unacceptable. The industry is only seen as an untapped money stream.

In calling the mill levy freeze "an illegal tax increase," Renfroe echoed the claim of a lawsuit filed December 13, 2007, by Jon Caldara, president of the "free market" Independence Institute, which challenges the constitutionality of the mill levy freeze. No court has ruled on the lawsuit, and the mill levy freeze contained in SB 199 is applicable only in the 175 (of 178) Colorado school districts that voted to waive restrictions on retaining and spending revenues mandated by the Taxpayer's Bill of Rights (TABOR) provisions of the Colorado Constitution, as Colorado Media Matters has noted.

Contrary to Renfroe's suggestion that it "brought in" additional funds to the state treasury, the mill levy freeze redistributes the burden of public school funding between the state and local school districts. According to SB 199's fiscal note, prepared by the nonpartisan Colorado Legislative Council Staff, "As amended, the bill freezes school finance mill levies, allowing a greater portion of school finance act funding to be paid from local property taxes in districts where voters have approved a ballot question allowing the district to retain revenue in excess of its constitutional limit."

Additionally, contradicting Renfroe's claim that funds made available to the state treasury as a result of the law "[were] not spent on education, the fiscal note estimated that because of initiatives mandated by the legislation, SB 199 would increase spending on preschool education by $6.7 million in FY 2007-08 and by $19.1 million in FY 2008-09. Additionally, the law phases in an increase in minimum per pupil funding above levels mandated by the Colorado Constitution at an additional combined cost for FY 2007-08 and FY 2008-09 of $19.6 million.

Renfroe also asserted without substantiation, "If you raise taxes on the energy business, we will ultimately have fewer jobs and less production of the energy we need to heat our homes and build our businesses." In contrast, the News reported that because of Colorado's "substantial property tax exemption," the "overall tax burden for oil and gas companies in Colorado" is significantly lower than that in Wyoming and New Mexico -- and higher only than that in Utah:

Energy companies enjoy a substantial property tax exemption in Colorado. In New Mexico and Wyoming, they don't.

So when the three energy rich states are compared and Colorado comes up the much poorer neighbor -- at least in the amount of severance tax it collects -- that's one major reason.

The property tax credit has cost Colorado hundreds of millions of dollars in revenue from oil and gas exploration.

While critics of the credit say it gives oil and gas companies an unfair tax break, industry officials respond that it is a just way to even out the tax burden.

Colorado is the only state that offers such a huge break.

[...]

The property tax credit has been in place since 1977 and traces its roots to a 1953 state law.

It also means the overall tax burden for oil and gas companies in Colorado is 5.7 percent of production compared with 11.2 percent in Wyoming and 9.4 percent in New Mexico. Only Utah at 4.5 percent has a lower tax burden for drilling than Colorado.

A recent report by environmental groups estimated the property tax credit cost the state about $200 million last year.

[...]

No other state, however, has a similar credit, said Matt Samelson, special projects director for the Donnell-Kay Foundation, a nonprofit that works to improve education in Colorado.

Kansas is the only other state with a tax credit at all and it is less than 4 percent of the property taxes paid by oil and gas producers, Samelson said.

The credit for property taxes goes back to a 1953 state law that imposed the first version of severance taxes as part of a company's state income tax return. At the time, energy companies could deduct 100 percent of their property taxes against the severance tax.

In 1977, when it became part of a new severance tax law, the credit was reduced to 87.5 percent.

There have been few attempts to eliminate or reduce the credit over the years. Former Gov. Dick Lamm tried twice in the mid-1970s to cut the credit by half, first through legislation, and then through a ballot measure. Both failed.

"There was no thought of raising the tax as long as I was in the legislature," said Dave Owen, a Republican who served in the General Assembly for 20 years until last year and chaired the powerful Joint Budget Committee.

—E.B.