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Columns

May 16, 2013

Imagine what might have been ...

(Continued)

There is little doubt that there are many in the area who want Otsego County to continue to operate the Manor. Yet at the same time there are those who choose, no matter what the benefits might be, to decry bringing any business activity to the county that might interfere in any way with their vision of the area. And therein lies the problem. Unless there is an opportunity to allow business activity, which will result in an increase in the tax base and thus in revenues that can be realized from property taxes, it becomes increasingly more and more difficult for the local governments to provide the services that residents want.

For example, the argument seems to have been made repeatedly that natural gas production in this area will only benefit the landowners who lease their property and the gas companies that develop the gas wells. However, given the tax laws in New York state, every local government and school district as well as the county in which there is a natural gas well will benefit by the fact that natural gas wells can be taxed as real property. The ad valorem tax, as it is known, allows those governmental entities which can levy property taxes to do so once the real property value of the gas well is determined. And, from what we learned by attending a recent meeting held in Oneonta by the Hometown Energy Group, a natural gas well can easily be assessed around $4.5 million. It should be noted that in the case of horizontally drilled gas wells, any one drill pad, which requires one square mile of space, can usually accommodate up to eight gas wells which would seem to make the real property value of each drill pad something in the neighborhood of $36 million.

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