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Johnson County Reaps Record-Breaking Taxes From CBNGA Development For the 2005 tax year, industry generated record breaking mine product taxes, severance taxes and mineral royalty fees to and from Johnson County. A recent tax revenue analysis said it’s all because of increased CBNG development. “Coal bed natural gas production in Johnson County is leading the way for strong economic development and growth in this fine community,” said Ken Kerns, author of the report. Ken Kerns is a governmental affairs consultant and a former County Commissioner. According to the report, Johnson County’s assessed valuation from CBNG production has skyrocketed to an all-time-high of $80 million. “Not only is this increase an all-time-high for CBNG, it has set a record-breaking assessed value for all mineral production in the history of Johnson County,” Kerns said. The report boldly suggests, through a variety of graphics and statistics, that Johnson County property tax revenues, from CBNG exploration and production, are increasing and on the rise. Dorothy Elsom, Johnson County Assessor, said CBNG development has made it possible for the county to finally meet budget requests. She said the CBNG companies are doing wonderful things to Johnson County. It’s the local people that see the difference. Rural and urban Johnson County citizens have benefited greatly. This includes teachers, students, graduating seniors, parents, employees, industry and local businesses. Librarian Cynthia Twing has noticed a drastic change. “We are enjoying the largest budget, ever! This is the first year I didn’t have to make adjustments downward to my budget. Johnson County funded all of it.” Kerns said more is to come. “CBNG tax revenues will keep flowing at this remarkable pace as long as there is CBNG development.” Elsom also expects to see additional increases to the county’s valuation. In tax year 2002, CBNG production accounted for 1 percent of the total property taxes in Johnson County. In tax year 2005, CBNG production accounted for 39 percent of all property taxes collected. Only two CBNG producers were in the top ten bracket for property tax payers in 2002. By 2005, nine CBNG producers were in the top ten bracket. The property tax revenue in Johnson County is distributed amongst various taxing districts, the county, fire district, weed and pest control, hospital, rural health district, conservation district(s), education, and the cemetery district. Dave Harness, a member of Johnson County Rural Health District, said CBNG production has allowed them to provide better health care through technology. Sandy Ward, Johnson County hospital administrator, said the hospital has also been impacted. The hospital was able to plan for future expansions to the emergency room and the clinic due to the tax revenues received, he said. He also said the hospital plans to expand their outpatient services. “The increased tax revenue certainly had a positive impact on us.” The revenue and distribution of property taxes are determined by the county’s appointed or elected boards. Then, the mill levy is approved by the Johnson County Board of Commissioners. CBNG producers contributed $8,464 in mine product taxes to these various tax receiving entities in 2002. Three years later, the mine product dollars contributed by CBNG companies rose to $6,048, 983. This is 714 times the amount generated in 2002! “Both ad valorem (mine product) taxes and property taxes are collected by the county treasurer, and distributed solely within the county where they are generated, except for the 12 mill education foundation levy, which is distributed by the state,” Kerns explained. As for severance taxes, which are collected by the Wyoming Department of Revenue, CBNG producers contributed $1,454 in severance taxes to the state of Wyoming for distribution in 2000. In 2004, CBNG producers generated $4,579,936 for severance tax collections. Some severance tax dollars are returned to Johnson County for their general fund operations. Buffalo and Kaycee benefit more than the county from severance taxes. In addition, the towns also receive Federal Mineral Royalty revenues distributed by the state, whereas the counties do not. Kerns explained mineral royalty distribution is different from both mine product tax and property tax distribution because it is distributed according to statute, by a calculated formula based on population and other factors. This formula is established by the legislature. All municipalities and counties within the state receive royalty, and or, severance tax distribution for their general fund operation. “Where the mineral revenue was generated has no bearing at all on where the money is distributed,” Kerns said. He called it a ‘share the wealth’ philosophy, meaning Buffalo, Kaycee and Johnson County would receive some distribution from the state, even if there was no mineral production in Johnson County. In 2005, Buffalo received $251,942 and Kaycee received 27,127 of Federal Mineral Royalties for general fund operation.
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