Amendment No.2 to benefit parish
The state Constitution requires the state to give parish governments a portion of the severance taxes collected in each parish. It requires that 20 percent of the state severance tax on all natural resources, other than sulfur, lignite or timber, be shared with the parishes of origin. But the amount each parish can receive is capped at $850,000, adjusted annually for inflation. The cap for 2009 was $907,534 for the calendar year.
Local governments are prohibited from levying a severance tax. The sharing of state severance tax revenue, which goes back to at least the 1921 Constitution, is intended to help compensate parishes for wear and tear on roads and bridges by oil and gas drilling equipment and other related traffic. The present cap has been in place since 2007, when it was increased from $750,000.
In 2009, the state collected $672 million in severance taxes and remitted nearly 5 percent back to the parishes where the tax was generated. Oil and natural gas collections accounted for more than 99 percent of all severance tax collections that year. Parishes would have received $134 million in 2009 if the full 20 percent had been distributed, but the per parish cap limited the actual distribution to about $32 million. All but one of the state’s 64 parishes received some severance tax revenue (one received only $6), and 28 received the maximum amount of $907,534.