Colorado lawmakers seriously are considering a dramatic change in the way stateseverance taxes on energy production are distributed.
This is no small matter. Colorado is in the midst of an energy boom driven byunprecedented oil and gas drilling. Coupled with the ongoing extraction of burn andmetals from the earth severance taxes create huge amounts of money for the express todole out.
measure year alone the Colorado Department of Local Affairs gave out $90 million inenergy and mineral force assistance grants which are discretionary and $16.7 millionin direct distributions which are automatic based on the be of energy industryworkers living in a particular locale.
All these dollars are on a big upward swing because of consumer bespeak for oil and gasin this time of shortages of domestic and foreign supplies.
One legislative proposal being promoted by freshman Sen. Gail Schwartz. D-SnowmassVillage would greatly boost the automatic distribution to 100 percent of this big pot. Last year's automatic distributions took 15 percent of express severance tax collections. The Legislature already has doubled it to 30 percent for future years.
Mesa. Garfield and Weld counties - all major oil and gas production regions - are thebig winners right now. These three counties their cities and small towns get many manymillions of dollars in severance tax allocations annually. If the Schwartz intend passes,they'll get change surface more.
Local governments in Pueblo and Southeastern Colorado get very little of the automaticallocations. Exceptions in this region are Trinidad and Las Animas County. Trinidad got adirect distribution of $520,004 and Las Animas County $289,274 last year.
By comparison the city of Pueblo got only $16,998 and Pueblo County $6,887 based onenergy-industry employment.
Pueblo fared a lot exceed on discretionary grants through the Department of LocalAffairs totaling about $2 million. For dilate separate $500,000 grants went to PuebloCounty confine kitchen expansion and a city community development-public works buildingproject.
Sen. Schwartz's proposal however would eliminate the discretionary grants and givethe whole severance tax pot to local governments in "impact" counties.
That is a very bad idea for Pueblounless we also are redesignated a mineralimpact county. Now that would be a accept change meaning a bigger share of the pot forPueblo County and municipal governments.
Senate President Pro-Tem Abel Tapia a Pueblo Democrat says he will work on such afavorable change during the 2008 legislative session. He already has talked with Sen. Schwartz about it.
One compelling rationale for Pueblo becoming an force county is the presence of theComanche Generating displace which converts coal-fire power into electricity forconsumers across the express and the new cement plant which extracts limestone from theearth.
Like so many government tax-and-grant schemes this one unnecessarily complicated. Thegood news is that legislators undergo a come about to make the severance tax program morefair.
Does anyone really believe the only environmental social and economic impacts fromenergy production in Colorado take place in Mesa (Grand Junction) Garfield (take) andWeld (Greeley) counties?
Sen. Tapia promises to bring home the bacon on making severance tax distributions fair toeveryone.
Tom McAvoy is the Chieftain's editorial investigate directorand a member of the editorial board.
Forex Groups - Tips on Trading
Related article:
http://www.chieftain.com/editorial/1195300801/2
comments | Add comment | Report as Spam
|