Ritter wants to tap oil, gas windfall funds

Move could end 'rainy day' dispute at Capitol

By Chris Barge, Rocky Mountain News (Contact)

Thursday, April 3, 2008

Photo by GEORGE KOCHANIEC JR.

Rep. Bernie Buescher,>D-Grand Junction, and Sen. Gail Schwartz, D-Snowmass Village, were all smiles as Gov. Bill Ritter spoke Thursday at the state Capitol.

Gov. Bill Ritter stood with a bipartisan group of lawmakers Thursday and said that legislation divvying up $2.7 billion in oil and gas revenues over the next decade would douse the latest firestorm at the state Capitol.

Republicans are accusing Ritter and fellow Democrats of increasing state spending to the maximum allowed by law and derailing GOP efforts to set aside some money to deal with a possible recession.

Ritter said that the new bill will create "rainy day and ongoing funds dedicated to higher education and local communities most impacted by oil and gas drilling in Colorado."

His announcement came nine days after declaring with similar fanfare that the same bill would rescue a science building on the Auraria campus and other higher education building projects that would have languished otherwise.

Accusations of politics

Bill co-sponsor Sen. Josh Penry, R-Grand Junction, expressed frustration along with other Republicans Thursday that Ritter seemed to be using the legislation for political cover.

"It's a fig leaf for this administration and the Democrats not to make one single tough decision," Penry said.

But Ritter's budget director, Todd Saliman, said that while events over the past two weeks have helped gel support for the bill it is only coincidental that the legislation could solve the state's recent predicaments.

Work on what became SB 218 began last summer when a legislative panel sat down to figure out how to re-allocate money from the oil and gas boom to better address some of the state's most pressing needs.

They decided to direct a large portion of the revenue increase away from K-12 education and into higher education.

Bill sponsors were in the midst of debating how exactly to direct the money two weeks ago, when new forecasts showed the state could expect far less revenue over the next few years. The Joint Budget Committee immediately took some building projects off the table.

One was an $111 million science building on the Auraria campus for which the state had already provided a third of the funding. A panic ensued, and higher education officials held a news conference in front of the hole where excavation for the building had begun to make their case for saving the project.

Economy a factor

The next day, Ritter announced that SB 218, in combination with another bill that would let the state take out $150 million in construction bonds, would fix the problem. The state could build the projects it scuttled after all.

One week later, SB 218 would come to Ritter's rescue again.

While both parties had talked for years about creating a rainy day fund, the looming recession helped Republicans pressure Democrats to do it. Senate Republicans came close to securing between $15 million and $30 million to create such a fund.

Penry approached Senate President Peter Groff, D-Denver, about the idea Tuesday. And by that afternoon, he, Sen. Mike Kopp, R-Littleton, and other senators were coming up with a plan in Groff's office.

Penry left that meeting early to meet with Saliman and SB 218 sponsors and iron out once and for all how to split up the oil and gas windfall. As he left Groff's office, Penry said it appeared Groff was going to co-sponsor amendments to the budget's "long bill" that could create a rainy-day account.

At the meeting with Saliman that afternoon, Penry and others convinced the administration to buy in to the spending formula they wanted. SB 218 would send a significant amount of the oil and gas money — at least $650 million over the next decade - into construction projects at colleges and universities.

It also would create permanent trust funds for higher education and local communities affected by drilling using a one-time royalties windfall worth hundreds of millions of dollars once the Roan Plateau was opened up for drilling.

Fuss as bill advances

Penry and others said that never at that meeting, nor in any of the meetings leading up to it, had anyone referred to those trust funds as "rainy day funds."

But that evening, Groff called Penry to tell him that he had be pulling his name from the budget amendments that would have created a rainy day fund. The bill Penry was working on would serve the same purpose, Groff told him.

Republican senators raised a fuss Wednesday and Thursday as the budget bill went forward, insisting that the rainy day fund still was needed.

Although he pulled his sponsorship of the amendments, Groff still voted for several of the motions to cut spending. He said that while the cuts were a good backup plan in case SB 218 fell through, the bill now appears to have good momentum.

Saliman said he objected to the proposed budget cuts because they would have saved a small pot of money at the cost of crucial programs such as school-based health programs.

• April 3, 2008

  9:30 p.m.

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  Theoldguy writes:

  Will this then replace the state income tax?

• April 3, 2008

  10:59 p.m.

  Suggest removal

  Gene writes:

  Right.

• April 3, 2008

  11:37 p.m.

  Suggest removal

  justright writes:

  Call this Black Thursday for all you extreme environmentalist and/or tree huggers!!!!

  The Gov sold you out. With the future reliance on the taxes from oil and gas that means he plans on supporting Roan plateau, Oil shale, and other tax generating carbon sources. Note there is no extra taxes being levied for renewable energy.

  You can't set in law spending 2.7 billion dollars and then make other laws to denie your own paycheck.

  I looks like the K-12 funding finally got rained a little tiny bit. Finally someone saw that earning 40k, 50k, 60k, 70k a year for 9 months of work was a pretty good wage.

  It will be most interesting how the new drilling rules effect their revenue stream. The only way you get extra revenue is with a lot of extra drilling. Of course this whole article could be misleading and they plan on using this extra revenue for whatever in years the budget has "short falls". For Libs every year there is a "short fall" and "budget crisis" in tax revenue.

  On balance "if" the truth is being told here I like it.

  Greenleaf I am worried about you, I think the Gov just made a deal with myside!

• April 4, 2008

  5:20 a.m.

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  Froward69 writes:

  it would seem justright and Gene... Governor Ritter is not the leftist commie you both have been harping about. Rather Ritter(D) is A Governor that has the best interests of our state at heart.

• April 4, 2008

  6:10 a.m.

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  Gene writes:

  Right. And the best interests of his unions comes in where?

• April 4, 2008

  10:06 a.m.

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  CarefulReader writes:

  Is "Chris Barge" Josh Penry's pen name?