2018 #COleg: Is there a sentiment, outside of @GovofCO, to raise severance taxes to implement the #COWaterPlan?

James Eklund and Governor Hickenlooper roll out the Colorado Water Plan, Thursday, November 19, 2015 via The Colorado Independent

From Colorado Politics (Marianne Goodland) via The Durango Herald:

Hickenlooper was initially expected to talk about his water legacy during the Colorado Water Congress luncheon in southeastern Denver, but instead, he addressed how he regards water and how the state ought to pay for the water plan’s estimated $20 billion price tag.

Before the start of Hickenlooper’s remarks, the Water Congress took the pulse of those in attendance about what the next governor should do with the water plan. Seventy-three percent said “use it,” 8 percent said the next governor should ignore it and 19 percent said the state should embark on a different path with regard to its water future.

Pollster Floyd Ciruli said the results show the new governor has to make sure the water plan and its issues remain a top priority, along with rural broadband, transportation and public education funding.

Hickenlooper referred to his recent State of the State speech and his reference to “topophilia.” No, that’s not something bad – it’s a love of place, according to the governor. And Colorado must do all it can to preserve its clean air and water, two of the most important aspects of the state’s infrastructure, he said.

Funding for the water plan has not been identified, Hickenlooper said. The governor said he is looking for a bipartisan approach to funding the water plan, in part to avoid the sensitivity that people have to being asked to pay more taxes. That could include, he said, using severance taxes.

But it would take a structural change to how severance taxes are levied to raise the kind of revenue anticipated to cover the state’s share of the water plan costs: around $100 million per year for the next 30 years, beginning in 2020.

Hickenlooper explained the state has some of the lowest severance taxes in the nation. And that hasn’t gotten any better after a 2016 lawsuit from BP that challenged certain deductions on oil and gas equipment. BP won that lawsuit, which forced the state to tap tens of millions of dollars from severance taxes to cover not only BP’s deductions but that of other oil and gas companies. That lawsuit exposed structural problems in the way severance taxes are collected, Hickenlooper said.

A structural change to severance taxes is something the General Assembly will have to deal with, most likely through a ballot measure, the governor added.

The idea of using severance tax money for the water plan isn’t that far-fetched an idea. Those dollars have been going to water projects for years, mostly to water providers for infrastructure and through grants and loans, although in small amounts. And severance taxes have been tapped directly to fund the initial implementation of the water plan, in areas such as alternative transfers of water in agriculture, conservation and water efficiency. But the state has, in times of trouble, also raided the severance tax fund to cover shortfalls in the budget, to the tune of $322 million in the past two recessions.

Hickenlooper said he believes the oil and gas industry will not stand in the way if the state seeks higher severance taxes, based on conversations he’s had with oil and gas CEOs. “They’re not complaining” about how much severance tax they pay in Colorado, especially after winning the BP court case.

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