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Tuesday, January 7, 2014

Concerns Linger Over Details on Ohio's Proposed Severance Tax - How Would it Affect Counties at the Heart of the Shale Boom?

From The Salem News:
Missing from the proposed bill is any mention of diverting the money back to the counties that are or will bear the brunt of the oil and gas boom. Dawson said the county engineers he has spoken with have another concern.
"The county engineers in eastern Ohio are concerned that if this happens these (drilling) companies will withdraw the money they are spending to upgrade and maintain our roads," he said.
Drilling companies enter into road-use maintenance agreements, or RUMAs, with local governments when using public roads to get to well sites. These RUMAs require the companies to upgrade the road, maintain it and restore the road to its original condition when completed.
"If they're paying a state tax and we go to them to get a road fixed, they might tell us to get our money from the state," Dawson said.
Read the whole article here.

Are these suggestions and questions valid?  Should counties that are bearing the most impact from the shale boom receive the lion's share of compensation from the proposed severance tax?  And would it create a situation where some of the good things that drillers have been doing for the counties will now stop?

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