×

Natural gas taxes are unreliable

Easy come, easy go. Officials in some Northern Panhandle counties are learning the old warning could have been coined to describe tax revenue from the natural gas industry.

It has fluctuated wildly during recent years, dropping drastically between 2016 and 2017, as we reported last week.

Property taxes are linked to gas production and prices. When they go up, windfall levels of tax revenue can be expected. When they go down, the bottom falls out.

In 2016, the biggest beneficiary in our area, Wetzel County, raked in $24 million in property taxes from gas wells. This year, the amount plummeted to $15.4 million. That meant county government and schools had $8.6 million less from the source.

Some other counties also suffered from the drop-off. Marshall County received $4.3 million less. Ohio, Tyler and Brooke counties saw revenue from gas-linked property taxes fall by between $1.9 million and $2.6 million.

Many school and county government officials saw it coming and exercised at least some prudence in spending what should have been viewed as found money.

For example, Marshall County commissioners have been leery of building the revenue into ongoing operations budgets. Instead, they have used much of it for one-time special projects such as establishing a new emergency ambulance service for the Cameron area. Wetzel County school officials held back some of the higher revenue from 2016 to cushion the decline this year. They also postponed some capital improvements projects.

Time will tell whether local governments and school districts have been restrained enough in building gas tax revenue into operating budgets. Those succumbing to the temptation to hire new employees, grant pay raises and spend the money on other ongoing expense items will pay a steep price in the future.

So may their taxpayers, when gas production drops off and/or prices fall. Without big bucks from the gas industry, county governments and school districts will have to turn to other taxpayers to make up the difference.

When will that occur and how severe will be the impact? No one can say with certainty. But it will happen, and local officials need to take steps to cope with the problem.

NEWSLETTER

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *

COMMENTS

[vivafbcomment]

Starting at $4.73/week.

Subscribe Today