DENVER—An education advocacy group took the first steps Wednesday toward a ballot measure that would raise state oil and gas taxes by about $200 million a year and use the money for education and for towns hit hard by the energy boom.
“Our state’s severance tax is unreasonably low,” said Tony Lewis, executive director of the Donnell-Kay Foundation.
The foundation submitted its proposed ballot measure to the Legislative Council, which makes recommendations on the wording and decides if it meets Colorado standards.
If the board signs off, proponents must then gather the signatures of about 76,000 registered voters to get the measure on the ballot.
Lewis said Colorado’s effective tax rate on energy—all revenue coming from severance, property, income and sales taxes—is 5.7 percent, compared with 11.2 percent in Wyoming, 9.4 percent in New Mexico and 7 percent in Oklahoma.
The Donnell-Kay proposal would eliminate two tax breaks but reduce the severance tax rate to 4.85 percent, from 5 percent. It wasn’t immediately clear what the effective tax rate would be.
Meg Collins, president of the Colorado Oil & Gas Association, an industry group, was in a meeting and was unavailable for comment.
Lewis said neighboring states have used energy tax revenue to create trust funds that allow schools to weather economic downturns more easily.
“Local (Colorado) communities are being hit hard by the rapid growth of the oil and gas industry,” he said. “They need resources to be able to mitigate the impact of this growth. And by dedicating some of the increased revenue to colleges and universities, the whole state will benefit for decades to come by investing in its future.”
Environmental groups have introduced other ballot proposals to increase energy taxes by $200 million to $300 million and use the money for renewable energy, wildlife habitat and communities impacted by the boom.
