Oil- and gas-related revenue collection and allocation in eight - - PowerPoint PPT Presentation

▶
oil and gas related revenue collection and allocation in
SMART_READER_LITE
LIVE PREVIEW

Oil- and gas-related revenue collection and allocation in eight - - PowerPoint PPT Presentation

Dec 02, 2022 245 likes •381 views

Oil- and gas-related revenue collection and allocation in eight states AK, CA, KS, NM, OH, OK, UT, and WV Daniel Raimi, Associate in Research, Duke University Energy Initiative Shale Public Finance Workshop August 31, 2015 | Durham, NC Note:

slide-1
SLIDE 1

Oil- and gas-related revenue collection and allocation in eight states

Daniel Raimi, Associate in Research, Duke University Energy Initiative Shale Public Finance Workshop August 31, 2015 | Durham, NC Note: the findings presented below are preliminary and subject to revision

AK, CA, KS, NM, OH, OK, UT, and WV

slide-2
SLIDE 2

Focus of this presentation

2

  • What government revenues are generated from oil and gas

production in our focus states?

  • How are those revenues allocated across different levels of

government?

  • We look at these issues state-wide for each state
  • We do not seek to make value judgments about the

appropriate level of government revenue

Daniel Raimi, Shale Public Finance Workshop Durham, NC March 31 2014

slide-3
SLIDE 3

Overview of presentation

3

  • Oil and gas revenue mechanisms in eight states
  • Comparison of oil- and gas-related revenues and allocation
  • Analysis and discussion questions

Daniel Raimi, Shale Public Finance Workshop Durham, NC March 31 2014

slide-4
SLIDE 4

We quantify direct government revenues from oil and gas production

4

  • State severance taxes or similar
  • Local ad valorem property taxes on oil and gas property
  • Lease revenue from state and federal lands
  • Our calculations do not include

– Indirect or induced impacts (e.g., income taxes, sales taxes) – Lease revenue on local government land – These revenues can be substantial

Daniel Raimi, Shale Public Finance Workshop Durham, NC March 31 2014

slide-5
SLIDE 5

We then quantify allocations to local governments from these revenue sources

5

  • How does revenue flow from severance taxes, property

taxes, federal leases and state leases?

– We focus on flows to local governments rather than state government

  • We do not quantify revenue flows from state general funds

– State-collected severance taxes and lease revenues often go into state general funds, where they may eventually flow to local governments – These flows are generally not related to levels of oil and gas activity

Daniel Raimi, Shale Public Finance Workshop Durham, NC March 31 2014

slide-6
SLIDE 6

Market value of oil and gas produced in FY 2013

Daniel Raimi, Shale Public Finance Workshop Durham, NC August 31, 2015

6

billion

Sources: U.S. EIA for oil and gas production volumes and oil prices based on statewide first purchase price. Bloomberg for natural gas prices based on regional market hub prices.

$0.0 $2.5 $5.0 $7.5 $10.0 $12.5 $15.0 $17.5 $20.0 $22.5 OH WV UT KS NM OK AK CA

slide-7
SLIDE 7

State and local revenue by mechanism in FY 2013

Daniel Raimi, Shale Public Finance Workshop Durham, NC August 31, 2015

7

share of production value 0% 2% 4% 6% 8% 10% 12% 14% 16% OH CA KS UT WV OK NM

State lands Federal lands Local property taxes Severance or similar

0% 5% 10% 15% 20% 25% 30% 35% 40% AK

z

Note: percentage figures do not represent effective tax rates.

Limited data

slide-8
SLIDE 8

State and local revenue allocation in FY 2013

Daniel Raimi, Shale Public Finance Workshop Durham, NC August 31, 2015

8

share of production value

z

0% 2% 4% 6% 8% 10% 12% 14% 16% OH CA KS UT WV OK NM Local grant program Other local gov't Munis Counties Schools trust fund Local schools Higher ed State legacy fund State general fund 0% 5% 10% 15% 20% 25% 30% 35% 40% AK Limited data

Note: percentage figures do not represent effective tax rates. *Alaska light blue bar represents revenues flowing to Borough governments, which also operate school districts.

*

slide-9
SLIDE 9

Local government revenue collection and allocation in FY 2013

Daniel Raimi, Shale Public Finance Workshop Durham, NC August 31, 2015

9

share of production value

z

0% 2% 4% 6% 8% 10% 12% 14% 16% OH CA KS UT WV OK NM Schools trust fund Local schools Local grant program Other local gov't Munis Counties 0% 5% 10% 15% 20% 25% 30% 35% 40% AK *

Note: percentage figures do not represent effective tax rates. *Alaska light blue bar represents revenues flowing to Borough governments, which also operate school districts.

No data

slide-10
SLIDE 10

Analysis of revenue collection and allocation

Daniel Raimi, Shale Public Finance Workshop Durham, NC August 31, 2015

10

  • In most cases, local governments are receiving adequate

revenue to manage impacts

  • Property and sales taxes are leading local revenue sources,

and appear to be sufficient in most situations

– Volatility can be a challenge

  • In some cases, additional revenues may be necessary to

manage impacts

– But it can be difficult to anticipate where fiscal challenges will arise

slide-11
SLIDE 11

Discussion

Daniel Raimi, Shale Public Finance Workshop Durham, NC August 31, 2015

11

  • Do you have any feedback on our calculations and

presentation of revenue data?

  • Do you have any feedback on our analysis of the data?
slide-12
SLIDE 12

For more information

12

Daniel Raimi

Associate in Research Duke University Energy Initiative energy.duke.edu energy.duke.edu/shalepublicfinance/ daniel.raimi@duke.edu 919-886-1952

Daniel Raimi, Shale Public Finance Workshop Durham, NC August 31, 2015

Note: the findings presented above are preliminary and subject to revision