by Paul Krza
It’s an old story at the gas pump, when price bumps up. Big Oil says a hurricane threatens Gulf of Mexico production, there’s an uprising in Nigeria or a fire at a Texas refinery. Overnight, it’s a dime or more and then up, up, up as the days go on. But when prices drop, it’s only by a measly couple cents.
Over the years, smart folks assigned to the task have come up with nothing even after long investigations as to why we get hit so hard at the pump. Even Sen. Tom Udall, back when he was attorney general, couldn’t pinpoint why gasoline prices spike big time.
My own theory – and I’m sure I’m not alone on this – is simple: Greed. Stick it to us hapless citizens for as long as they can, squeezing until we scream and probes start. Then back off, and wait for another opportunity to empty our wallets.
Why not, I was thinking the other day, take this same nickel-and-dime strategy and use it to our benefit? To help offset our looming state government deficit, let’s just squeeze a few more dollars out of the oil and gas industry, slowly but surely.
Oh, yeah, I’ve heard what passes for the New Mexico Republi-can Party these days – those wacky callers on Right-wing Radio in the Duke City – and their deficit “solutions”: Cut, cut government “waste,” get rid of free-spending Bill Richardson and corrupt Democrats and shut down the Railrunner.
For starters, I also think it’s smart to make “government” run more efficiently, and it’s time to rein in excessive, high-dollar, top-level public job salaries. But even with judicious trimming, the need for more bucks is clear, especially for schools, where, despite what you hear, we really haven’t thrown that much money at ‘em. Talk to any teacher (and there’s a lot out there doing great jobs) and you will immediately see they need be paid more, much more.
So where to get the dollars? The Gov has appointed a “revenue task force” to come up with ideas, which if you’ve been reading, have been mostly more “sin” taxes or even, gasp, making us once again pay taxes on food.
Whoa, I say. Instead, look at the big revenue elephant in the room: Oil and, maybe, gas, and even coal. Shhhh. You can hear the predictable screams already. “Now is not the time to raise taxes on the oil and gas industry,” goes the line we’ve been seeing in big full-page newspaper ads. (When ever is a good time, one might ask?)
Actually, a good chunk of the money we’ve raised and saved over the years comes from our resources (and the emphasis is on the word, “our,” meaning that most oil, gas and other minerals lie underneath state or federal public lands). This stuff is “severed,” never to be replaced, so we charge a “severance” tax, and royalties, on it to get our share of the action and to compensate us for the loss.
Now, thanks to earlier good legislative sense, we have billions tucked away (maybe around $10 billion) in what’s called “permanent funds,” part of which we use to build stuff we need (detractors call it “pork”) and also help pay for government operations. In fact, we can (and should) use some of this money now – it’s like when you or I get pinched for bucks and keep less in savings. We can postpone some projects, divert more of the incoming mineral revenue for operations and yes, dip a bit into the savings, even if it requires a constitutional amendment. That’ll help ends meet.
But we will still need more revenue, and that’s where my hit-‘em-with-a-nickel-or-a-dime proposal comes in. A slight hike will go a long ways, I figure. They won’t even notice, or if they scream, well, it’s just like us little folk at the pump.
Of course, they will scream. They already have. Just the other Sunday, NM oil and gas company officials were complaining about “tougher” regulations on their messy drilling practices. The compliant Albuquerque Journal bought the line, with the front-page headline, “Losing Our Golden Egg.” Industry didn’t even have to buy an ad.
And, yes, you will hear the wail of a legion of well-paid lobbyists along with a high-bucks media blitz warning that drilling will evaporate in New Mexico. Look at everything “our” money has paid for, they will say, forgetting that it’s not their money but our rightful tax revenue.
Oh, also, is it all surprising that the chairman of the state Republican Party is Roswell oil tycoon Harvey Yates ?
No, responsible oil and gas companies won’t shut down. Oil is going for $78 a barrel now. In June, Hobbs-area oil honchos were saying $70-$75 oil would revive the industry. I say let’s get in on the ground floor, with maybe even an escalating tax hike as prices inevitably improve.
Sure, oil and gas is already taxed in New Mexico, but when it comes down to hitting us with food taxes or squeezing a bit more out of our minerals, I’d say the choice is clear.
Paul Krza is a frequent contributor to the Mountain Mail but his views do not necessairly reflect those of the newspaper.
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