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May 16, 2013

Imagine what might have been ...


At the meeting we acquired a brochure with the somewhat lengthy title of “Local Tax Benefits for the Town of Triangle and Whitney Point Central School District from Natural Gas Drilling Operations.” From this brochure we learned that if one well pad supporting six horizontal gas wells was located in the Town of Triangle, the town would stand to receive in the first three years of taxing the well as real property something in the neighborhood of an addition $1.8 million in property taxes.

Likewise, if each of the seven towns in the Whitney Point Central School District were to have one drill pad, each supporting six horizontal wells, the school district would, in the first three years, realize an additional $6.5 million in property taxes.

In a similar vein, it should be pointed out that energy pipelines are also taxed as real property. For example, we learned at the meeting in Oneonta that the Town of Windsor, has nine and one half miles of natural gas pipeline running through it. And in one year, the county collected $310,000, the town collected $157,000 and the school district collected $793,000 in property taxes on that pipeline. Of course, Otsego County also has a natural gas pipeline, the Tennessee pipeline, running through it and has for a number of years now. It is expected that this year the three towns and three school districts as well as the county will realize a total of $217,499 in property taxes from that pipeline.

Thus, in thinking about the potential benefits of an industry such as natural gas in terms of property taxes, we do think that there is an argument to be made that the ability of any governmental entity to provide services to its residents depends to a certain degree on the strength of that governmental entity’s revenue stream. Of course we are not suggesting that saving the Manor as a public facility would be possible if only natural gas drilling were allowed in the area. However, it might have helped. We really don’t know and probably never will.

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