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A drastic decline in oil and gas revenues in Summit County has left county commissioners here little choice but to raise property taxes by one-third on July 1.

According to County Auditor Blake Frazier, assessed values of property countywide have dropped from $2.4 billion last year to $1.6 billion in 1989. While some of that is due to lower home and commercial property values, it is estimated that $660 million of the $800 million drop is directly attributable to the oil and gas industry.The county depends heavily on oil and gas taxes to support its $3.6 million general fund budget. Last year, more than half the taxable property assessed in Summit County - $1.5 billion of the total $2.4 billion - was the crude oil and natural gas being processed by petroleum companies in the region.

The primary processor in Summit County is Amoco Oil, which Frazier said is responsible for generating about 90 percent of the tax revenues the county receives from state-assessed property. Other oil and gas companies operating inside county limits did not experience a similar slip in reported revenues this year, and Frazier says the Amoco drop-off was a complete surprise.

In fact, it wasn't until late May, after commissioners had decided on a no-change budget for fiscal year 1989-90, that he received a phone call from the state Tax Commission letting him know the county would be "down by $650 million" this year in state assessed value. With cuts in home and other values, it would mean a drop of one-third countywide.

Commissioners looked at cutting services in the wake of such bad news, but in the end decided it might be time for a tax hike. "They (commissioners) feel like they still need to operate the county at its existing level of service," said Frazier.

So, to make up for the drop in assessed value, county residents will find their property tax rate rising from last year's .0.001613, the second lowest in the state, to 0.002503. That translates to $53 more on a $100,000 home, and will put Summit County at about the seventh or eighth lowest property tax rate in Utah, predicts Frazier.

The tax increase has to go through by the end of June, but Frazier adds the county is also going to ask the state Tax Commission to order an audit of Amoco's reported production figures. "It looks to us, just on the outside, that they (Amoco) may not have given the correct figures to the state Tax Commission," he said.

Amoco's Denver spokesman Ted Neptune defended the company's tax numbers by noting they included the costs of a new piece of natural gas processing equipment it had added to handle production from the Anschutz Ranch East Field in Summit County in 1987. "We believe . . . the tax valuation system allows us to deduct operating and processing cost from gross receipts in natural gas production," said Neptune.

The cost of the new equipment and added processing accounts for almost the entire $600 million difference, according to Amoco tax experts. And, although it was added in 1987, the company saw no deductions in the taxes it was charged for production in Summit County in 1988. Amoco questioned the Tax Commission about the discrepancy and was rewarded with the huge discount on its taxes this year.

But Amoco is not the only one appealing to the state. Frazier is meeting this week with attorneys from the Utah Association of Cities and Counties to discuss Summit County's request for an audit and reconsideration of state's decision.