Ritter hasn't picked ballot item to back

But he supports repeal of tax credit for energy firms

By Chris Barge, Rocky Mountain News (Contact)

Originally published 12:05 a.m., April 1, 2008
Updated 02:03 a.m., April 1, 2008

Proposed regulations for the oil and gas industry are now on the table, but it's still not clear how a severance tax question will be served up to the voters in November.

Industry officials have argued for months that Gov. Bill Ritter's administration should wait until the release of the proposed regulations before talking about a severance tax hike. But Monday, those officials showed no interest in negotiating with Ritter and lawmakers on the tax question, now that the rules are out.

"As we've stated in the past, we look at those as two very separate issues," said Meg Collins, president of the Colorado Oil and Gas Association. "We've got the rule-making, which is a huge issue to us and we're very concerned about that, and we remain opposed to any increase in severance tax. I'm not looking at them as linked - they're two big issues that are facing the industry."

Ritter said through a spokesman that while he intends to back a repeal of a property tax credit to the industry that would mean about $200 million in additional annual revenue to the state, he has not decided which of the proposed ballot questions to back.

A citizen initiative that the governor helped broker would give most of the windfall to higher education while reserving a portion for environmental and wildlife protection, and a smaller portion for communities affected by the oil and gas boom. Backing that measure would allow Ritter to avoid a fight on the House and Senate floors.

But backing a measure referred to voters by the legislature could help him build a coalition supporting the ballot question.

Rep. Kathleen Curry, D-Gunnison, said Monday she was more confident than ever that her severance tax bill was the way to go, because it included dedicating more of the revenue to communities affected by oil and gas drilling.

Curry said she was encouraged by a phone call Monday from a major national oil company operating in Colorado, asking for a meeting this week to discuss her bill.

Curry said she hasn't lost sight that while she, Ritter and others want to raise severance taxes, the industry is dead-set against it.

"Will this be completely adversarial?" she asked. "If so, we must be mindful of how to build a coalition that's viable and competitive in that environment."

Ritter said through his spokesman, Evan Dreyer, that no decision is imminent on which measure he will back. In addition to deciding whether to let the legislature vet the ballot question, Ritter is still weighing how he wants to divvy up the new revenues, Dreyer said.

"I think the consideration is what's realistic," Dreyer said. "And if there is an opportunity to address a need or needs, it should be done in a way that makes sense both from a policy perspective - and because this will need to go before voters - a political perspective."

bargec@RockyMountainNews.com or 303-954-5059

Severance tax question

The governor has yet to decide which of the proposed severance tax ballot questions to back - a citizen initiative or a measure referred to voters by the legislature.

* What would voters decide? Whether to eliminate a rule that allows oil and gas producers to apply a large property tax deduction to their severance tax bill. Repealing the industry's ability to use the credit would mean about $200 million in additional annual revenue to the state.

* How will the funds be used if the measure passes? About 60 percent would go to higher education, 15 percent to be invested in renewable energy, 15 percent in wildlife habitat and 10 percent to help communities affected by drilling.