2018 #COleg: Amendment to HB18-1338 would shore up severance tax funds

Oil and gas development on the Roan via Airphotona

From The Fort Morgan Times (Marianne Goodland):

Severance tax revenues have fallen off dramatically in the past three years, down from nearly $300 million in 2014-15 to about $57 million in 2016-17. That’s due partly to lower oil and gas drilling activity and to additional property tax deductions awarded to the oil and gas companies, the result of the state losing a lawsuit two years ago to oil giant BP.

As a result, the state doesn’t have enough severance tax money to cover some of those obligations, and the Joint Budget Committee decided to put $30 million in general funds (income and sales tax) into the main severance tax fund to ensure those operations and activities are covered.

Sonnenberg’s idea is to amend House Bill 1338 to start paying back some of the hundreds of millions of dollars in severance tax money that state borrowed to shore up the budget in recession years. Sonnenberg’s amendment will deal with more than just that money; he also wants to be sure there’s enough in the fund to avoid charging boat owners a fee for inspections for zebra mussels. That’s another measure — House Bill 1008 — that’s awaiting final debate and a vote in the Senate.

The measure would charge boaters between $25 and $50 for a stamp that would cover the cost of inspections at state waterways, such as Green Mountain Reservoir in Summit County, where a zebra mussel was found last year.

Sonnenberg considers the zebra mussel problem one of statewide interest, hence his desire to fund the inspection program out of severance tax dollars rather than requiring boaters to pay for it. Sonnenberg is a co-sponsor of House Bill 1008 but voted against it in the Senate Appropriations Committee because of its funding source. “With a $1.3 billion surplus we can pay back severance tax dollars” and cover the cost of the program, estimated at around $2.2 million, he said.

A boost to severance tax dollars might also help out the state water plan. Last week, the annual CWCB projects bill came out, with $7 million targeted toward water plan projects. That’s $3 million less than what the water plan got last year, and that’s because of the lack of severance tax dollars, sources told this reporter. “We have to live within our budget,” Sonnenberg said.

The projects bill devotes $3 million out of the water plan’s $7 million planned appropriation to storage, which Sonnenberg applauds.

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