For 30 years, Colorado has tried to mitigate the effects of energy development by directing certain revenues to communities that were affected by activities such as mining and natural gas drilling.
The Local Government Energy and Mineral Impact Assistance Program was designed to give money to communities “socially or economically impacted” by energy development.
Some, such as state Rep. Bernie Buescher, D-Grand Junction, think this money ought to be used to fix roads worn out from heavy-equipment traffic, or similar projects.
But as Denver Post reporter Mark Couch reported Monday, the program has taken on projects that stray from its roots. It’s a situation that cries out for a thorough examination.
As the fund has gotten fat from surging revenues, it has become a stretch to see how these grants and loans relate to energy development. Included in the projects that have gotten funding from the state Department of Local Affairs are $200,000 for a carousel museum in Burlington. Another $600,000 went to Steamboat Springs to spruce up city-owned ski-training facilities.
Meanwhile, a Garfield County request for $189,000 to conduct an air- quality study to assess local pollution generated by drilling was denied.
The money comes from two sources: the state severance tax that companies pay when they extract oil, gas and minerals; and from the state’s share of energy royalties paid to the federal government.
And while the fund’s receipts fluctuate with the ebb and flow of energy development, in recent years the revenues have made for a significant pot of money. In 2006, the Colorado Department of Local Affairs (DOLA) gave out $90 million in grants and loans through the program. In 2005, it was $129 million.
The decision-making authority over expenditures from the fund resides with the governor’s appointed chief of DOLA, and critics say the money has been used for the governor’s pet projects.
This era of constitutionally mandated state spending formulas and restrictions has left the legislative branch with precious little spending discretion at times. It seems inappropriate that the power to spend this substantial fund lies solely with the executive branch and does not go through the budgetary process.
That is not to suggest that the projects are a waste of money or unworthy of state support.
For instance, money from this fund was pledged to help rebuild Granby after a deranged man in an armored bulldozer leveled key parts of the mountain town.
The state spent $300,000 from the fund to help rebuild the library, which was devastated in the bulldozer incident. Certainly, the library needed to be rebuilt, but was this a project that mitigated energy development in Grand County? Of course not.
These are among the topics that ought to come up as a special committee of the Colorado General Assembly examines the allocation of revenues from this fund.
We hope the committee, which includes both state House and Senate members, takes a comprehensive look at the history of the program’s funding and expenditures and carefully assesses whether its operations are in keeping with its mission.
