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Up in air: Higher severance taxes

Ritter yet to say whether he backs question on ballot

By Chris Barge, Rocky Mountain News (Contact)

Published March 27, 2008 at 12:30 a.m.

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Rep. Kathleen Curry is drafting a bill to put the question before voters this fall.

Rep. Kathleen Curry is drafting a bill to put the question before voters this fall.

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Gov. Bill Ritter said he will wait until next week to decide whether to back putting a severance tax increase on November's ballot.

But a lawmaker close to the decision-making process said that Ritter and the legislature's Democratic leadership already have decided to back a measure raising the tax paid by the gas and oil industry. At this point, they are just trying to decide whether to allow the legislature to vet the question before it goes to the ballot, Rep. Kathleen Curry, D-Gunnison, said Wednesday.

Curry is drafting a bill that would refer to voters a severance tax hike question similar to one announced this week by environmental and higher education interest groups.

Both questions would ask voters to eliminate a rule that allows oil and gas producers to apply a large property tax deduction to their severance tax bill. And both questions would divvy up the money in roughly the same way, with 60 percent going to higher education, 15 percent to be invested in renewable energy, 15 percent in wildlife habitat and 10 percent to help communities impacted by drilling.

Ritter said through a spokesman that while he was "instrumental" in negotiating the citizen's ballot initiative, he hasn't committed to any proposal. He said he is waiting to make up his mind until Monday when the citizen's ballot initiative officially will be filed, said governor's spokesman Will Alston.

Democrats are well aware that the energy industry would oppose either measure. So officials now must decide which route to getting something before voters carries the greater chance of success.

If Ritter decided to back Curry's plan, and Democrats introduced her bill in the House, she predicted the oil and gas industry would lobby hard against it.

"They probably would have some success with some of the members, so people would be staking out their position publicly from (the legislature) and I don't think that's really the way the governor's office wants to go, is to have a lot of 'no' votes on record on this," Curry said.

Members on either side of the aisle also would struggle with voting to place a tax increase on the ballot during an election year, Curry said. "The vote count would be challenging, and I've known that from the beginning."

Also slowing down the administration's decision-making is the pending release of new rules governing the oil and gas industry, Curry said.

Those rules are due out Monday and Curry predicted they won't be as objectionable as the oil and gas industry had feared. That may give her side room to convince the industry to back at least some portions of the tax increase, Curry said.

"It's getting late in the session I know, but we've been really counting on this March 31 date on the rule-making to open the dialogue with the industry," Curry said.

The oil and gas industry questions whether now, as Colorado faces a possible recession, is a good time to raise taxes on one of the only industries keeping the state's economy afloat, said Stan Dempsey, president of the Colorado Petroleum Association.

However, Dempsey said he will be relieved to know soon how Ritter plans to place the question on the ballot. "Trying to understand what folks want to do has been like chasing ghosts on the severance tax issue," he said.

Comments

  • March 27, 2008

    8:16 a.m.

    Suggest removal

    a_watcher writes:

    It is time that someone grabbed the environmentalists by the scruff of the neck and said "enough." They already have full control of the state lottery proceeds. Dumping 30% of this money into environmental causes is outlandish.

    Note that not a dime of this money is to be directed to roads and yet just a month ago, Bill Ritter thought highways were important enough to propose to collect a $100 fee for each car to fund one third of the needs.

    If we are dumb enough to pass anything like what is being proposed, we deserve to be taxed out of our socks, and that is what will happen.

    Not another dime to the environmentalists until our real problems are solved.

    Bill Ritter's priorities are so totally messed up that the best thing that can happen to the state is that he serve only one term.

    Sure do want to thank the Rocky for endorsing him in 2006. Good move! Sarcasm intended.