Routt County commissioners decry Colorado Senate’s ‘raid’ on severance tax fund
Steamboat Springs — Routt County commissioners are among local government officials in Colorado who are railing against the latest plans of the state legislature to appropriate $20 million from the mineral severance tax fund to balance the 2015-16 budget.
“Since I’ve been a commissioner, this is the fourth or fifth time they’ve raided the severance tax to take care of the state’s budget, and to the detriment of local governments,” Routt County Commission Chairman Doug Monger said. “If we don’t make noise about it, it will become a normal event. We have to get out there and say ‘This really hurts.’”
The State Senate voted last week to attach a specific bill regarding the severance tax to the 2015 state budget bill. The Senate approved the $26.4 billion budget bill by a 21-14 vote. It still must be approved by the House.
Proponents of the plan say they need the money to help backfill the state’s general fund budget because they must refund $70 million to the state’s taxpayers under the provisions of the Taxpayers Bill of Rights (TABOR). TABOR, which caps annual tax collections, requires that excess amounts be refunded.
The severance taxes are imposed by the state on mining and energy companies for the amount of resources they “sever” from the state’s soil.
The amount of severance taxes received annually by different units of government vary widely with the amount of mineral extraction in their jurisdictions from year to year, but it’s estimated that Senate Bill 255 would take a total of $135,000 from governments in Routt County including $4,000 from Yampa and $70,000 from the county.
Routt County Finance Director Dan Strnad said the monies are directed toward projects planned by the county’s Road and Bridge Department that can be deferred when insufficient funds come back from the state.
The mayors of Grand Junction and Rifle have joined all three Routt County Commissioners in protesting that a portion of the severance taxes were always meant to go back to local governments to offset the impacts created by those industries. State senators who backed Senate Bill 15-255 contend that because mineral and energy extraction have contributed to the state revenue surplus that brought the TABOR refund into play, the taxes should offset a part of that.
In a letter to the Senate Appropriations Committee, Grand Junction Mayor Phyllis Norris rejected the notion that there is a logical connection between the severance tax fund and the TABOR refund.
“Senate Bill 15-255 sets a very dangerous precedent for balancing the state’s budget on the back of local governments,” Norris wrote. “These revenues are intended for local government, counted on by local government and utilized by local government for essential and ongoing infrastructure projects.”
Routt County Commissioner Tim Corrigan noted that funds needed by the town of Yampa in South Routt to build a new water tank and upgrade its wastewater plan come from severance tax funds channeled through the state Department of Local Affairs.
County Commissioner Cari Hermacinski characterized the Senate vote as an example of legislators from more densely populated parts of the state taking advantage of under-represented rural areas.
The severance tax funds are, “typically coming from rural areas where we don’t have a lot of political clout. They take it from the least politically populated counties,” Hermacinski said. “Ten of 100 legislators in the State Assembly come from the Western Slope.”
Monger called the Sate Senate’s action a “raid” and said it’s especially frustrating that it’s taking place while energy and mineral extraction are in decline on the Western Slope, adding decreased employment to the challenges faced by some small towns and counties that still are not fully recovered from the Great Recession.
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