Report from the Public Issues Committee

Title: Report from the Public Issues Committee
Author: Larry Anna, Chairman
Publication: The Outcrop, May 2003, p. 7

Severance tax issue

Recently, Colorado’s severance tax issue came out of its lair, saw its own shadow, and declared six months of controversy. With Colorado’s state budget looking rather lean, this was the perfect time to bring out old agendas and give them some new spin. For example, each year, the Colorado Department of Local Affairs (DOLA) gives counties money to help them plan, manage, and provide infrastructure due to energy development impacts. The money comes from severance taxes on minerals, coal, oil and gas. Recently, a state advisory group — the Minerals, Energy and Geology Policy Advisory (MEGA) Board — stated that there appears to be insufficient public and local government awareness of the benefit derived from this industry and these severance tax funds. For example, the Board was discouraged to see continuing public and local government efforts to stop or curtail state-regulated oil, gas, and mining activities, while at the same time requesting Energy Impact Assistance Grants. The MEGA Board recommended some type of criteria or policy to limit grants in those counties, such as Delta, Gunnison and Costilla, that are supporting bans on mineral and energy development. The Board stated that this would be fairer to local governments in other energy-producing counties who are more industry-friendly.

A Denver Post Editorial on March 16, 2003, defended the counties that were under fire, citing the following excerpts:

“I think the board is kind of punishing these counties that are not being cooperative with their industry,” said Colorado Department of Local Affairs Director Bob Brooks.

“l think they’ve misread us,” Delta County Commissioner Wayne Wolf said. “We have a huge amount of tons of coal going out of this county every day.”

“This is a real stretch. We are trying to figure it out,” Gunnison County Administrator John DeVore said. “They (the county commissioners) don’t feel we are unfriendly toward the extractive industry. ”

“We’re certainly not anti-energy, ” Costilla County Commissioner Ed Vigil said. “I wish they (the advisory board members) would come and tell us what we’ve done to be treated like this.” He said one possibility is developing new guidelines for giving out grants. Currently, impacts, need and the availability of community matching funds are considered.

In the future, Brooks said, there could be more emphasis on acquiring support from energy and mineral companies for grant requests and more consideration given to how much mining activity goes on in a particular county.

Thanks to Logan MacMillian for providing most of the information.