Recently, the Colorado Energy Coalition released its annual “Resource Rich Colorado” report at the Energy Professionals in Colorado forum. The report highlighted the economic benefits that Colorado receives from the energy sector. Chief among the benefits were good paying jobs, which is why it’s puzzling that some would want to hinder the industry’s growth.
Over the past five years, the oil and gas industry, saw a 19.5% job growth rate in Colorado compared to a 14.3 percent growth nationwide. In Colorado, the sector directly employed 43,430 people at 2,300 firms across Colorado with an average salary of $100,930.
This is great news, particularly in light of Colorado’s questionable economic recovery. One would think that Coloradans would be supportive of the energy industry given these stats. Alas, no.
Take, for example, the recently-released TBD recommendations. One such recommendation to address the state’s budget shortfall is to “Consider changes to the tax code so that it more accurately reflects Colorado’s underlying economy. Some of the fastest growing sectors of the economy are either exempt or taxed at a lower rate than others.” Given the high rate of growth described above, it’s not outlandish to think that perhaps the TBD participants are referring to the energy sector. Additionally, the transportation section recommends increasing the gasoline tax to pay for infrastructure needs, which is highly punitive for the much-heralded middle class.
While the average American is harmed by increased gas costs, an increase in the motor fuel tax also has the potential to harm oil and gas companies. The state and federal “gas tax” is levied not on purchase price, but price per gallon. According to ColoradoGasPrices.com, the Colorado fuel tax is 22 cents per gallon of gasoline and 20.5 cents per gallon of diesel. Since the tax is on the per gallon, the net effect of taxing each gallon is fewer gallons purchased. By decreasing the amount of gas sold, the companies that rely on sales to fund research and development and job growth will be harmed. It goes back to the old adage – tax what you want less of.
So, does TBD wants less job growth…?