NORWICH – The Smyrna town board has piggybacked on a resolution passed in the neighboring Town of Lebanon that calls for an enhancement tax on natural gas sales from local production.
Town Supervisor James B. Bays said Tuesday that his board unanimously voted Feb. 13 to request that the state legislature grant it the authority to tax gas company revenues directly. Lebanon, located in Madison County, passed the same measure Feb. 12.
Both town supervisors plan next to seek approval from state representatives to introduce the measure in the state Assembly and Senate. Bays said Lebanon Supervisor James Goldstein had already garnered the support of Assemblyman William Magee. And, after recent conversations with Senator James Seward, Bays said he “was reasonably confident” that Seward would sponsor the legislation in the Senate.
Goldstein and Bays have held discussions in consultation with their respective town boards due to increased gas well exploration activity in the adjoining townships over the last several years. Major supplies of natural gas are estimated to be located in both townships. Bays said at least five wells have been drilled in a natural gas vein in Smyrna, for example.
Concerns raised with the exploration, siting and servicing, point to both direct and indirect negative impacts on the municipalities including the wear and tear on roadways from transporting heavy drilling and excavating equipment; local safety concerns, such as the remediation of potential environmental hazards, emergency procedure protocols, and mapping of shut off valve placements; and basic municipal employee training and equipment needs.
Bays pointed to a recent accident in the Town of Brookfield where a natural gas exploration company sent high pressure air into an underground drilling site to free a drilling bit. “Doing so sent water into homes in a half-mile area, forced out by the high pressure air,” he said.
Bays said he expects individual opposition to the proposed legislation, but believes that it will be outweighed by the need to protect residents from unanticipated, unnecessary and uncompensated imposed costs.
“There will be no impact on landowners who will have negotiated their own leasing deals,” he said.
Goldstein said in a press release that the fuel production tax would be utilized to reduce property taxes for all town taxpayers. “This natural gas is a local resource and it should benefit all the residents. The town boards of Lebanon and Smyrna are in agreement that towns of our size with limited tax base and small industrial segment should be able to impose such a tax to benefit all property taxpayers. Businesses cannot access this gas nor can most residents utilize it. The gas is put in the pipeline and shipped to other parts of the state or other states. There is currently little local benefit other than the royalties that some property owners receive from natural gas sales. This legislation, if adopted, would ensure that all town property owners benefit.”
Bays said his board was “110 percent behind this.”