Ritter's task gets tougher as group seeks tax increase

Governor hoping for consensus on levies for drilling

By Chris Barge, Rocky Mountain News (Contact)

Friday, February 15, 2008

Ritter said he is listening to supporters of tax measure.

Gov. Bill Ritter's effort to build consensus on how to spend the money from a possible tax increase on the oil and gas industry got tougher Thursday.

A group backed by the state's most influential environmental organizations filed paperwork to ask voters in November for a severance tax increase to preserve open space and fund clean energy initiatives.

The oil and gas industry has joined several outspoken rural Republican lawmakers in opposing an increase of the tax on natural resources "severed" from the land.

Ritter said Thursday he is being pressured by advocates of higher education, transportation and health care to find money for their causes, and a conversation about raising severance taxes to shovel money toward one of them is "still very much alive."

Ritter said he is listening to the backers of the environmental tax measure and understands their rationale for moving forward with a citizen initiative. In the end, however, he said it would be best if no more than one severance tax question winds up on the November ballot.

Rep. Kathleen Curry, D-Gunnison, is drafting a severance tax bill in the legislature. She said that too many severance tax questions on the ballot could cause them all to fail. Nonetheless, she said the environmental lobby has every right to file its own citizen initiative.

"This is indicative of how strongly people feel about getting a revenue stream for those areas," she said.

Backers of the environmental initiative include The Nature Conservancy, Environment Colorado, Trout Unlimited and several land trusts and sportsmen's groups. Environment Colorado spearheaded the passage of Amendment 37 in 2004, which required utilities to produce more electricity from renewable resources.

The petitioners actually filed four separate but similar initiatives Thursday, each of which uses slightly different funding formulas to arrive at roughly the same goal. They said they plan to eventually campaign for one of the four initiatives for the November ballot.

Generally speaking, the proposed ballot questions would ask voters to increase taxes on the oil and gas industry by $200 million to $300 million a year. The money would be divided, with 40 percent going to a new clean energy fund, 40 percent going to wildlife and environmental protection, and 20 percent going to communities impacted by the oil and gas boom.

Sen. Josh Penry, R-Grand Junction, said Western Slope voters will reject the initiative when they find out they are getting the "table crumbs of what's left" from the increase.

"It is ironic that the same groups that have obstructed the natural gas sector at every turn now view the same sector as a gravy train," he added.

Penry has joined with other rural GOP lawmakers in saying they will petition for a competing question if a severance tax question makes it onto the November ballot.

The oil and gas industry strongly opposes a severance tax increase, particularly since the state is in the midst of rewriting regulations that it views as a possible "regulatory tax."

"This anti-energy coalition is talking about policy that - while it's good for their own radical agendas - is bad for Colorado businesses, bad for Colorado residents and bad for Colorado communities," said Meg Collins, president of the Colorado Oil & Gas Association.

Petition backers have joined Ritter in saying they aren't against the industry making profits. They just want Colorado to get its fair share compared with neighboring states, which have higher severance taxes.

And while the industry has far more money to invest in a campaign to kill a severance tax hike at the polls, backers say public interest appears high for going forward with such an initiative.

"Voters don't think Colorado is a Wendy's drive-through for the industry," said John Neuhof, West Slope field director for the Colorado Environmental Coalition.

bargec@RockyMountainNews.com or 303-954-5059