Raiding the severance tax in Colorado

March 29, 2015

By Bob Cox

Some opinions, comments and links relating to what is happening in this great nation and, in particular, in Western Colorado.

 

The Western Slope is about to get drilled – again.

Colorado has on its books a law commonly known at TABOR, or the Taxpayer Bill of Rights. The initiative that brought the law about had good intentions. I have always said that, but as with many of these initiatives, it had some consequences that are not so good, and lawmakers are loath to mess with the substance of the law.

They are not so reluctant to use the law in any way they can to get their hands on pots of money that should not be included in the TABOR at all. The most important for those of us who call the Western Slope of Colorado home, is the severance tax assessed on companies that extract our natural resources from our lands. This money is intended to help with the impacts that the extraction industry has on the locales where the extraction takes place. Half of the money goes to the Department of Natural Resources. The other half is doled out in grants and direct payments to energy-impacted cities, towns and counties.

This year the State of Colorado collected about $70 million over and above the amount allowed by TABOR. That money, by law, has to be returned to the taxpayers, although there are always very inventive ways as to how that happens. There are some “unallocated funds” in the severance tax purse. That simply means that there are grants and direct payments that have not been applied for or made as of right now. It also means that the state lawmakers see the funds as a piggy bank that they have not yet broken.

Originally, these spendthrifts we have representing us wanted to grab $47 million from the severance tax fund to help repay the amount mandated under TABOR. Now they have “settled” on just $20 million. Either amount is wrong. First of all, this money was not collected from the average taxpayer. It is collected from the companies that are providing us with coal, oil and natural gas. If the money is returned at all it should be returned to those companies so they can lower our prices and expand their explorations and production. Secondly, this is not what the severance tax was intended to be used for in the first place.

Of course the supporters of this transfer of funds fall back on the old arguments of needing to steal the money from somewhere other than the general fund because they don’t want to “hurt” the children (education) or health care (Medicaid).

It is time for our lawmakers to come up with some plans to keep what are supposed to be earmarked funds from being used to balance a top-heavy state budget. It is time for them to be brave enough to ask the voters to remove the severance tax from the TABOR oversight – maybe even give it its own limiting rules, which would return surplus to those who really paid it in the first place.

Remember, I only send out these missives to those who have asked for them. I do not share your email addresses with anyone and I use the Reagan email precisely because they don’t share or sell the addresses either. If you are getting this because someone forwarded it to you and you don’t want it, tell him or her not to forward any more. On the other hand, if you received a copy and would like to see more of my ranting, simply drop me a line at coxnotes@Reagan.com I will put you on my exclusive, but growing list.

Bob

© Robert R. Cox 2015

 

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