$62 million in royalties, energy taxes distributed

By Charles Ashby
Wednesday, September 5, 2012

Local governments will see about $8 million more in severance tax and federal mineral lease payments this year, indicating the state’s energy industry is seeing improvements, according to the Colorado Department of Local Affairs.

More than 500 counties, local governments and school districts will share in about $62 million in direct distributions from increased production during the 2012 fiscal year, which ended June 1.

The money is paid out to all local governments based on the impact the oil and gas and mining industries have on them.

That means communities, such as Mesa and Garfield counties, that have the most industry workers, mines, well permits and industry production see higher distributions.

“We are glad to see more energy impact funds distributed this year to local communities,” Gov. John Hickenlooper said in a statement. “These funds are an important resource for communities to use in planning for and providing essential public projects and services.”

Severance tax distributions even surpassed those in 2008 before the recession began. Then, the state paid out nearly $25 million to local governments, 8 percent less than this year’s disbursement.

But it was federal mineral lease payments that saw the largest jump in that time. Those payments went from about $7.5 million in 2008, to more than $32 million this year, a 300 percent increase.

FML payments come from oil, gas and mining leases on federal lands. Colorado shares nearly half of the royalty payments from those leases with the federal government.