Sales Tax Revenue Continues to Climb in Ohio’s Shale Country
Since Utica Shale development took off in 2011, companies have been investing a tremendous amount of capital in eastern Ohio. Billions of dollars are being spent to create much-needed infrastructure, developing well sites, and constructing regional headquarters for service companies. In addition, landowners have benefited from lease payments, businesses have seen an uptick in sales activity, and counties are having their roads improved on behalf of the companies operating in their communities.
This kind of investment translates to another often-unappreciated benefit: a significant increase in sales tax revenues. Going through the Ohio Department of Taxation’s sales tax distribution website, the true impact of that increased revenue is revealed: Over the past two years, counties with Utica Shale activity have all experienced remarkable increases in sales tax apportionment.
Consider: In 2011, the total sales tax apportionment for just five counties — Carroll, Harrison, Noble, Guernsey and Belmont — was more than $15.5 million. But by 2013, revenue jumped nearly 50 percent to $22.9 million.
Let’s take a closer look at how oil and gas development is rejuvenating eastern Ohio’s economy, county by county.
In 2011, Utica Shale development was just beginning to take off in Carroll County. Since that time, CarrollCounty has continued to be the top permitted county in the state with 360 Utica permits. In 2011, Carroll County’s sales tax apportionment was $1,933,378.81. As development continued to increase in the county, so did tax revenue: activity in 2012 brought in $2,551,864.99, representing a 32% increase in apportioned funds for the county.
At the end of 2013, Carroll County’s growth continues – and doesn’t look to be slowing down anytime soon. In 2013, CarrollCounty brought in $3,279,914.92 in sales tax apportionment. The growth from 2012 to 2013 was a solid 28 percent. To put the total growth into perspective, sales tax apportionment in Carroll County grew by a total of 70 percent over just a two year span.
HarrisonCounty is the uncontested leader in sales tax apportionment over the past two years. The county now has two natural gas processing projects by MarkWest and Utica East Ohio operating and expanding in the county. Utica Shale developers are also seeing very promising results from wells there, which why it is the second most permitted county in the Utica.
In 2011, HarrisonCounty’s apportionment was $979,510.94. As development continued to increase in the county, 2012 brought in $1,211,773.78 – a 24 percent increase. In 2013, Harrison County received an amazing $3,131,912.21 in sales tax apportionment, which is an incredible 158 percent increase in just one year. Of course, if we look at a combined two year comparison, that number grows to a monstrous 220 percent growth.
Representing the southern portion of current Utica Shale development, NobleCounty is currently experiencing growth it has not seen in years. The home of the first oil well ever developed, the reemergence of expanded oil and gas development is a welcomed boost to the local economy. Noble County is now home to a MarkWest natural gas processing complex and some very successful wells by Rex Energy, Antero Resources and CONSOL Energy.
NobleCounty received $726,578.72 in sales tax apportionment in 2011 prior to shale development. As we moved into 2012, the tax receipts grew to $858,006.59, representing an 18 percent increase in apportioned funds for the county due to responsible development.
In 2013, development increased as companies saw strong results from their wells, and MarkWest began constructing its natural gas processing complex. This new development boosted the county’s sales tax apportionment to $1,300,085.89, representing a 51 percent over 2012. All told, thanks to Utica Shale development Noble County’s sales tax apportionment grew 79 percent over the past two years.
On the western edge of current Utica Shale development, GuernseyCounty is encountering remarkable sales tax apportionment growth due to increased shale development in the region. Being at the crossroads of I-70 and I-77, Guernsey County is not only benefiting from development in the county, but also the development in neighboring counties where goods and services may be less attainable.
In 2011 GuernseyCounty received $4,072,011.88 in sales tax apportionment prior to shale development. Moving into 2012, Guernsey County experienced a sales tax growth of 13 percent by bringing in $4,591,357.14 in revenues. Fast forward to 2013 and Guernsey County is continuing to grow, bringing in $5,427,179.59, which is an 18 percent increase from 2012 and a noteworthy 33 percent improvement since 2011.
BelmontCounty is home to some of Ohio’s most productive wells by Gulfport Energy. The continued exploration and development in this county bodes well for the area’s economic future, too. In 2011, Belmont County’s apportionment was $7,825,276.73. As development continued to increase in the county, tax revenues grew by 12 percent to $8,738,465.46.
At the end of 2013, Belmont County continues to grow at a steady pace, bringing in $9,794,803.51 in sales tax apportionment, representing another 12 percent growth year over year.
These revenues are going back to counties to help them run their local governments and pay for needed projects, many of which may not have had available funding prior to shale development. When discussing oil and gas development, the conversation is usually focused on the jobs created by the industry (a recent ODJFS report showed shale jobs are up 30% over the past two years), or the low natural gas prices resulting from increased development. Rarely do folks begin to correlate the impact of having a thriving economy and improving public budgets, which is exactly what’s happening in the counties where development is taking place.
Utica Shale development has brought immense growth to our counties’ sales tax apportionments over the past two years. As we continue to develop the Utica Shale and invest into our communities, this number will continue to rise, giving our entire state a stronger and more sustainable economic future.