Utica Shale Local Support Series
Road Improvement Payments
In its second report The Utica Shale Local Support Series: Ohio’s Oil & Gas Industry Road Improvement Payments, the upstream oil and natural gas industry has spent more than $300 million in eight Ohio counties from 2011 to the first quarter of 2017, and improved more than 630 miles of roads from these investments alone. This report takes a closer look at the history of the Road Use Maintenance Agreement (RUMA) and the execution of these agreements within eight counties spanning from 2011 to 2017: Belmont, Carroll, Columbiana, Guernsey, Jefferson, Harrison, Monroe and Noble. This report is the second of its kind in an on-going Utica Shale Local Support Series between OOGA and EID Ohio that collectively examine multiple ways in which oil and natural gas production directly benefits local schools, counties, townships, cities, villages and other vital local services and infrastructure.
· Total Investment Made in Ohio Infrastructure: More Than $300 Million
· Total Number of Road Miles Improved: More Than 630 Miles
· Amount of Investment Directly to Local Communities: 100 Percent
The Ohio Oil and Gas Association (OOGA) along with Energy In Depth (EID) has released its first white paper in The Utica Shale Local Support Series: Ohio Oil and Gas Industry Property Tax Payments report, highlighting that the oil and natural gas industry has contributed $43.7 million to six Ohio counties from 2010 to 2015. The report projects that over the next decade, $200-$250 million will be paid to these six counties alone. We encourage all of our members to read the report and distribute the findings among interested parties.
Given the record-breaking oil and natural gas production in 2012 and 2013, it should come as no surprise that the real estate property tax revenue, officially referred to as an ad valorem tax, has climbed as result. Of the $43 million generated between 2010 to 2015 from this tax, 95 percent was a direct result of horizontal drilling activity in the Utica Shale. In addition, of the total receipts from all real estate property taxes collected in 2015, the ad valorem taxes from wells accounted for (on average) 24 percent of total revenue collected from all real estate property taxes for these counties. This is significant, as prior to 2015, the ad valorem tax revenues from wells accounted for less than one percent of total revenue from all real estate property taxes.
Ohio oil and natural gas reserves are assessed and taxed as real estate, similar to property taxes paid on a residential home. All of the revenue collected from this tax goes directly to support the areas where the oil and natural gas is produced: counties, villages, townships, cities, and most importantly, local schools.
Key Findings For Ohio Shale Counties:
· Total Property Tax Paid (2010-2015): $43 Million
· Projected Property Taxes to Be Paid (2016-2026): $200-$250 Million
· Amount of Property Tax Directly Paid To Local Governments/Schools: 100 Percent
· Percent of Property Tax Collections to Ohio Local Schools: 60-70 Percent