Wyoming Counties Face $42 Million in Delinquent Mineral Taxes

In the face of a statewide budget crisis, mineral extraction companies owe Wyoming taxpayers over $42 million in county taxes unpaid on their operations throughout the state. Last month, Powder River Basin Resource Council released a new report entitled Tax Delinquencies and Budget Deficits: A Case for Reform, which tracked delinquent mineral taxes in 12 counties from 2006-2016. The report outlines the root of the problems with how these delinquent mineral taxes are collected and offers four simple, common-sense remedies.

“Mineral tax delinquency in Wyoming counties is a problem that needs to be addressed. Our entire state is suffering following the most recent bust; several counties have had to cut back on personnel and services, and some have been dealing with school closures. We can’t afford to continue to allow money rightfully owed to counties to go uncollected,” said Joyce Evans, chair of Powder River. “Simple policy changes are needed to ensure that we can continue to provide services and can maintain our high educational standards.”

Delinquent mineral taxes strain counties with already tight budgets, and curtail services such as emergency response, road maintenance, and education. Because much of the money collected by counties gets redistributed among all Wyoming school districts, education often suffers most.

Solutions

The report recommends that the legislature enact simple solutions:

  • Counties should collect ad valorem mineral taxes on a monthly basis to prevent large-scale debts from accumulating in an energy downturn.
  • Counties should be able to lien all ad valorem taxes, which would place counties higher on the list for collection during bankruptcy proceedings.
  • The state should establish a funding pool to assist counties during bankruptcy proceedings, or allow access to the Federal Natural Resource Policy Account to allow counties to retain the necessary counsel to recoup lost taxes.
  • Legislation should allow the Wyoming Oil & Gas Conservation Commission and the Department of Environmental Quality to consider a company’s state and county tax debt in Wyoming before allowing the sale or transfer of assets.

“Our schools, roads, public safety and other necessities are more than 70 percent dependent on mineral taxes, so it only makes sense that we make it easier for counties to collect these taxes. This report offers four common sense recommendations to assure fair funding of public services,” said Powder River vice chair Bob LeResche of Clearmont.

The single largest unpaid tax bill recorded in the report is due from Alpha Natural Resources, a major coal producer that formerly operated two mines in Campbell County. According to the report, Alpha owed $19,117,173.84 to Campbell County at the time of its bankruptcy filing in August 2015. To date, the county has only received partial repayment.

But coal companies are not alone among those delinquent in mineral extraction taxes. The Clerk of Sublette County, Wyoming, Mary Lankford, told Wyoming Public Media why the loss of anticipated taxes from oil and gas production is relevant to the county’s budget.

“We’re dependent on that money to run our shop, run all of our different departments, our law enforcement, our jail, the whole bit. And the money doesn’t come,” Lankford said. “Here we are, we’ve committed the money, we’ve budgeted the money, and the payments don’t get made, so we’re short of money.”

You can read Powder River’s report on its website.

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