Wyoming Firms Found To Underpay Taxes
Recent revelations that major Wyoming oil and gas producers may have underpaid millions of dollars in property taxes have prompted lawmakers to consider a bill that would expand the state's authority to audit and monitor mineral production.
Taxes on oil and gas producers are a major source of funding for Wyoming's schools. Last year, the mineral industry accounted for $362 million of the $517 million raised by the state through property taxes. About 75 percent of those revenues were used to support education.
In recent weeks, school and coun4ty officials have been leading the call to strengthen the state's auditing system. The declining revenue base, they say, has made every potential funding source doubly valuable to education.
Last year, the legislature cut $15.9 million from the current fiscal year's precollegiate-education budget. Observers predict that the legislature will not restore those funds in next year's budget, which was scheduled for a final vote late last week.
'Poorest and Loosest'
Independent audits in two counties suggest that a better system could net the state millions of dollars in addi8tional revenues.
Currently, oil and gas producers' property taxes are based on the market value of their minerals, which is self-reported. Both the quantity of minerals extracted and their price at the time of extraction, however, are rarely audited by the state.
As a result, Wyoming's "system of collection has been termed the poorest and loosest among the Rocky Mountain states," said Lynn Simons, the state superintendent, at a press conference last month.
In Converse County, Ms. Simons said, an audit has resulted in the return of $450,000 to both the county and state for five years of unpaid taxes and interest. And early results from an audit in Campbell County indicate that state and local authorities stand to gain a total of $2.8 million in unpaid taxes and interest.
Randy Fetterolf, one of the independent auditors, declined to name the companies that had allegedly under-reported their production figures. He said, though, that both small and large producers had been found to submit inaccurate reports.
Since the preliminary reports of the audits were revealed late last month, state lawmakers have been considering a measure to strengthen the auditing and monitoring system.
The Senate is set to review the bill, which was approved by the House earlier this month. Under the House's version, however, no funds would be earmarked for three independent auditors, as was provided for in the original version of the bill.
There is some speculation in the state that the revelations regarding under-paid taxes may be linked to a bomb that exploded in the car of Dennis Peterson, the superintendent of the Laramie County school district, which includes Cheyenne.
The bomb, which blew a hole in the car's engine, detonated approximately 36 hours after Mr. Peterson gave a presentation to superintendents from across the state on the issue, the same day Ms. Simons held her press conference.
The police "are investigating the possibility that this may be related," Mr. Peterson said last week.
Police officials, who noted the bomb would have killed the educator if it had detonated correctly, say they have no suspects in the case and have not ascertained a motive.
Vol. 07, Issue 25