Lower severance tax revenue to hit water projects, studies

The falling price of natural gas and a lack of pipeline capacity to deliver the gas to consumers across the country will leave the Colorado Water Conservation Board with minimal money to underwrite water projects and studies, state officials said Wednesday.

Jennifer Gimbel, the director of the Colorado Water Conservation Board, told state lawmakers the board is expecting to receive only $14 million in severance tax revenue for the 2009–2010 fiscal year. Severance tax is collected from oil and gas producers drilling on state land.

“We’re looking at a drastic reduction in funds we’ll have available for the next year,” Gimbel told a joint hearing of the state House and Senate natural resources committees.

Harris Sherman, director of the Department of Natural Resources, said a lack of pipeline capacity along with falling commodity prices have lowered tax revenue Colorado will collect from natural gas producers next year.

“That is really quite a hit,” said Rep. Judy Solano, D-Brighton.

Complicating the shortfall to the Colorado Water Conservation Board rolling grant and loan funds are $30 million in proposed cuts to the agency’s 2008-09 budget.

The situation, Gimbel said, is “looking more serious all the time.”

John Redifer of Grand Junction, a member of the Colorado Water Conservation Board, said one of the biggest issues the funding shortfall could create would be a drop in funding for the river basin roundtables.

The roundtables, created earlier this decade, allow communities in the state’s various river basins to study and confront how best to meet Colorado’s water needs.

“If we can no longer provide funds for the roundtables,” Redifer said, interest in participating in the process will drop.


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