State expects to collect $356 million of severance tax
By Mike Saccone, The Daily Sentinel
Published June 23, 2008 at 10:10 p.m.
Colorado is projected to rake in a record $356.4 million of severance tax revenue in the 2009-10 fiscal year, according to figures presented Monday to the state Joint Budget Committee.
The revenue, which the Colorado Legislative Council attributed to spiking oil and gas prices and increased production, is expected to be a boon for Western Slope communities feeling the effects of the energy industry boom.
Kevin Bommer, a lobbyist for the Colorado Municipal League, said Western Slope communities "desperately need" whatever revenue the state can muster.
Bommer cited Rifle as one city experiencing the stress of housing and supporting energy workers and their families.
He said the city could use some of the money to improve and expand its drinking water system, for example.
State Rep. Bernie Buescher, D-Grand Junction, said the severance tax revenue, derived from drilling on private land, will be bolstered by $223.2 million expected to flow to the state during the same period from drilling on federal land.
Deb Frazier, spokeswoman for the state Department of Natural Resources, said the increased funds also will help Colorado confront its growing pine beetle epidemic and other natural resource issues.
With more funds, she said, other programs, such as the Low-Income Energy Assistance Program or reclamation projects around Colorado, would be more likely to be fully funded.
John Redifer, a member of the Colorado Water Conservation Board, said the cash infusion also will help the state play catch-up on building water storage.
Redifer said the state is already projected to fail to meet demand for water by 2030. Any help toward heading off that projection, he said, would be welcomed.
"We know we have to do an awful lot of work if we're going to meet our future needs for water and that's going to take a lot of money," Redifer said. "I think there's a very natural tie-in with our severance tax money and our ability to meet those needs."
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June 24, 2008
10:11 a.m.
Suggest removal
zippy66 writes:
This article is obviously referring to the existing severance tax, because the severance tax increase that Gov. Ritter is backing isn't going to make the ballot!