Statewide property tax revenue collected from oil & gas production drops from $134 million in 2016 to $96 million in 2017

From The Times Leader

WHEELING ± Wetzel County Schools Superintendent Ed Toman said officials anticipated the loss of $8.6 million in property tax revenue from oil and natural gas production during the 2017 tax year compared to 2016.

Because property tax revenue related to West Virginia oil and natural gas production is based on the material’s value from two years prior, the low price environment of 2015 is now leading to lower government revenue.

“We anticipated the decline in revenue and held back some of the surplus from the prior year to fill the gap. We also had some school improvement projects in our plans that we put on hold until the revenue rebounds,” Toman said.

Statewide, West Virginia collected about $134 million in property tax revenue from oil and natural gas production during the 2016 tax year. This number fell to $96 million for 2017, reflecting a decline of $38 million.

“Although the amount of property taxes may fluctuate year over year due to many factors, including commodity prices, West Virginia producing counties continue to receive significant funds generated from the development of our gas resources,” said Anne Blankenship, executive director of the West Virginia Oil and Natural Gas Association.

In mid-2014, a 1,000-cubic-foot unit of natural gas held a value ranging from $4 to $4.50 on the New York Mercantile Exchange. One year later, the same unit of natural gas was worth only about $2.50.

Therefore, even as the amount of gas drillers pumped from West Virginia wells grew from 2014 to 2015, the simultaneous collapse in prices led to a decline in property tax revenue from the 2016 tax year to the 2017 tax year.

Wetzel County down to $15.4 million from $24 million in 2016

Wetzel County operates four high schools across its relatively rugged and sparsely populated terrain: Magnolia, Valley, Paden City and Hundred. Due to heavy shale drilling activity, the county received the most oil and natural gas property tax revenue of all West Virginia counties at $15.4 million, but this is down from $24 million the previous year.

Marshall County also claims numerous drilling operations. The county collected $14.9 million for tax year 2016, only to watch the amount drop to $10.6 million in 2017.

“With the decline of oil and gas drilling in our area, Marshall County Schools has seen a drop in its revenue. However, at this time, it hasn’t been a major factor in our operation,” Marshall County Superintendent Jeffrey Crook said.

Earlier this year, Ohio County Schools officials said they anticipated lower property tax receipts, so they cut about $1 million out of their budget compared to the previous year. Indeed, the county’s haul of $7.2 million this year is down from the $9.1 million of last year.

Last month, officials in Brooke County voted to close Colliers, Lauretta B. Millsop and Beech Bottom primary schools in the name of saving money. The county saw its property tax revenue from oil and natural gas dip from about $5 million in 2016 to $2.4 million in 2017.

Tyler County saw its collections tumble from $7.3 million to $5.3 million. With Hancock County accounting for very little production, its total actually increased from $7,818 to $11,171.

“The price of natural gas has seen an uptick over the last several quarters and we hope that trend continues,” Blankenship said. “If it does, we’ll see property tax receipts rise, providing more resources for schools and to provide services to residents of our counties and municipalities. Additionally, those counties where natural gas and oil production is occurring have received hundreds of millions of dollars in the way of property tax receipts over the past several years.”

Shale Boom Visible: West Virginia Dry Gas Production through 2016 – Source: EIA

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