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Suits Over Marcellus Property Taxes Could Clobber Schools, Counties

West Virginia counties with a lot of Marcellus drilling have come to depend on property taxes from the wells. (Pixabay)
West Virginia counties with a lot of Marcellus drilling have come to depend on property taxes from the wells. (Pixabay)
April 5, 2018

CHARLESTON, W. Va. — A pair of cases before the West Virginia Supreme Court over gas well property taxes could be "devastating" to local governments and schools.

Antero Resources won its cases in Doddridge County Circuit Court, but the implications could extend statewide or industry-wide. The company said tax offices aren't letting them deduct true post-production expenses for Marcellus wells.

Doddridge County Commission President Greg Robinson said the ruling could cut school funding by more than $4.5 million, and under the state's school aid formula, public education really depends on what were strong revenues from those taxes.

"Doddridge County gets $0 from the state of West Virginia,” Robinson said. “So obviously, that's going to be potentially devastating to the county."

According to one court filing, in 2017 state rules said Antero could deduct no more than $175,000 per well. The company argued the actual cost of transport, pipelines and keeping the wells running after they were drilled was between $650,000 and $1 million a year.

Robinson said the cases could reduce county and school revenues by about 15 percent. He said they had already started on an $80 million plan to get more than two-thirds of county residents connected to public water.

"We're moving on that,” he said. “Of course, if we have no money to do the engineering or whenever a match is required, then that will have to come to an end."

He said depending on what the court does, the county hopes to negotiate a solution with the company. But Robinson said one way or another, they will have to adjust.

"It would be very good if this could be equitably resolved amongst the parties,” he said. “But if it's not, I guess we'll all have to live with the results from the Supreme Court."

A final decision could come in May or June.

The case numbers are 17-AA-1 and 17-AA-3.

Dan Heyman, Public News Service - WV