GRAND JUNCTION, Colo.—A western Colorado lobbying group says a ballot proposal on mineral severance tax revenue could divert money from areas most affected by the state’s energy boom.
Club 20, which includes business and government leaders, says an analysis shows the proposal could reduce the revenue going to areas where energy development is occurring.
Parts of western Colorado are experiencing record rates of natural gas drilling.
A spokesman for the campaign behind the measure said figures used in the analysis are much lower than revenue projections from the Office of State Panning and Budgeting.
“This is misleading,” said George Merritt, spokesman for A Smarter Colorado.
Merritt said communities affected by energy development would get tens of millions of dollars in additional revenue under the measure, proposed for the November ballot.
The proposal backed by Gov. Bill Ritter would ask voters to end property-tax deductions for the oil and gas industry that allows producers to take a credit of up to 87.5 percent of the prior year’s property tax liability from their severance taxes.
Sixty percent of the money would go to a fund called Colorado Promise Scholarship; 15 percent to help pay for local impacts of the oil and gas industry on transportation and water quality; 15 percent for wildlife habitat; and 10 percent to clean energy projects.
Part of the money would also go to a trust fund so students wouldn’t lose their scholarships if revenues decline.
An analysis by Jim Evans, the former director of the Associated Governments of Northwest Colorado, said based on state tax figures, local governments would have lost $23 million in 2006 and $45 million total over the last six years if the proposal had been in place.
Severance taxes are imposed on such nonrenewable resources as oil and gas. The state splits the funds with local governments and also awards grants with the money.
“It’s a raw deal any way you slice it,” said state Sen. Josh Penry, R-Grand Junction.
Merritt said the analysis is misleading because the numbers are so low. He said Club 20 used the figure of $200 million from 2006 while state budget officials say the severance tax revenue in 2009 could range from $237.4 million to $321.4 million.
The analysis also fails to show an additional $18 million in state transportation funds going to local governments, Merritt said.
Evans said it makes sense to use figures from previous years rather than projections because oil and gas prices are volatile. He said there’s no guarantee that local governments would get $18 million more in highway funds.
Reeves Brown, executive director of Club 20, said western Colorado communities dealing with the impacts of energy development—more traffic, growth—fear losing money they otherwise would get. He said the group’s executive committee has voted unanimously to oppose the measure.
