OTSELIC – The possibility of collecting what’s being called an “enhancement” tax on natural gas sales from local wells has appealed to yet another Chenango County town.
Prompted by action taken earlier this month in Smyrna and Lebanon in Madison County, the Otselic Town Board last week agreed to request of the state’s Legislature a revision to home rule law that would permit such a tax.
The resolution has the backing of state Assemblyman William Magee, D-Nelson, and state Senator James Seward, R-Milford, and could be introduced in Albany this year. Under the proposal, gas company revenues would be taxed directly on natural gas sales from local production.
Chenango County Supervisor James B. Bays, D-Smyrna, has called the tax an “enhancement tax” because it is necessary for local governments in order to afford the cost of any drilling and exploration, wear and tear on highways, community safety needs, municipal employee training and equipment needs.
By supporting the neighboring towns’ resolution, Supervisor David J. Messineo, D-Otselic, said Otselic would have the opportunity to use the tax if needed.
“We aren’t going to be so greedy that we chase them away,” he said of the gas exploration companies. “We want this.”
Natural gas has been discovered in shallow layers of Oneida sandstone throughout several northern Chenango County municipalities, such as along county Route 16 in Smyrna, Otselic and Plymouth. Many wells have been drilled by Nornew Inc., an Appalachian Basin independent natural gas exploration and development company.
Steve Novakowski, vice president of engineering for Nornew, said the company currently operates 41 wells in Madison and Chenango County, although some of them were drilled in the early 1960s.
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