By defeating two rival severance tax amendments, 52 and 58, Colorado voters may have set the stage for compromise between Gov. Bill Ritter and the energy industry.
At first glance, that may seem unlikely. Why should the oil and gas folks, fresh from drubbing Ritter’s Amendment 58 at the polls, want to talk about anything other than where to plant the next drill pad?
The answer is that the energy industry, while protective of its bottom line, is also conscious of its need to be seen as a good corporate citizen. That gives it an incentive to seek a livable compromise on both tax and environmental issues.
There’s precedent for such a compromise. In 1976, Democratic Gov. Dick Lamm, having failed to get a severance tax through the GOP-controlled state Senate, helped sponsor a severance tax initiative. Hard-rock mining interests joined with the oil and gas forces to defeat him.
But a year later, industry leaders sat down with the governor and legislators and wrote the existing severance tax law that Ritter unsuccessfully tried to modify Tuesday.
In our view, one of the key reasons for Amendment 58’s defeat this year is that Ritter made no serious effort to negotiate a compromise with industry leaders and other stakeholders. If he had worked with local government groups like Colorado Counties, Inc., he might have been able to arrive at a compromise formula to reduce but not eliminate the existing credit for local property taxes. That could have forestalled the opposition from local leaders in the energy-producing areas that helped kill the plan.
Such a compromise would have raised less “new money” than the $321 million tax increase Ritter tried to force — but a lot more than the outright rebuff voters handed him Tuesday.
Likewise, if Ritter had worked more closely with higher education leaders, he could have leveraged a smaller but still substantial tax increase to aid higher education. The bipartisan Senate Bill 218 that passed the legislature this spring earmarks part of federal mineral leasing revenues to form a permanent fund to benefit colleges and universities.
Finally, while we opposed Amendment 52’s effort to lock severance tax revenues into the constitution to fund I-70 projects, we aren’t ruling out a change in the distribution of existing revenues if the legislature determines such a shift could aid higher education or highways without compromising environmental protection or water needs.
Simply put, we urge Ritter to learn the lesson Lamm did and sit down with his former adversaries in search of common ground. As Ritter knows, that 1977 compromise not only recouped Lamm’s stature after his 1976 severance-tax rebuff, it also helped re-elect him in 1978.
