Ritter holds $37.4M in revenue for emergency

Gov. Bill Ritter will hold back $37.4 million in distributions of severance tax grant funds to communities impacted by energy development in case he needs the money to help balance the state budget.

That amount includes $25 million that Ritter decided in August to withhold from distribution until early next year, should it be needed for the state general fund. Now, that money won’t be released before June 30, if at all, and the same goes for another $12.4 million in severance tax funds.

The withheld distributions were announced Wednesday as part of a broader set of measures designed to deal with a worsening state budget picture.

“It’s understood that there’s cuts and sacrifices that have to be made statewide,” said Linda Rice, spokeswoman for the state Department of Local Affairs, which administers the grant program.

The grants come from taxes on energy production. Half of severance taxes go to the Department of Natural Resources, and 35 percent goes into the grant program. The remainder is allocated to a direct distribution program that enables energy-impacted communities to spend the money at their discretion.

That program isn’t affected by Wednesday’s measures, and it is identified in a presentation by Ritter’s budget staff as a critical service being protected from cuts.

In August’s budget-balancing measures, Ritter also tapped $14.3 million in Roan Plateau federal oil and gas lease revenue that had been intended to go into a permanent fund to benefit local governments.

He also immediately diverted $5 million from severance grant funding into the general fund, and later upped that diversion to $7.6 million.

Reeves Brown, executive director of the Western Slope advocacy group Club 20, said he would like to see none of the money intended for local communities touched.

He added he’s skeptical they’ll ever see any of the $37.4 million, if it’s been tentatively identified as being necessary to balance the state budget.

“I would really be surprised if the state somehow between now and June came up with another $37 million that they can replenish that with,” he said.

Aron Diaz, executive director of Associated Governments of Northwest Colorado, said his group will urge Ritter to use unspent federal stimulus bill funds to replace any diverted severance tax funds.

The money could go to job-creating infrastructure projects in areas that have been affected by energy development, such as a new west Parachute Interstate 70 interchange and improvements to Rio Blanco County Road 5, he said.

Brown said he realizes state officials face tough choices about what to cut. But he worries about the cumulative effects that cuts to impact grants and higher education could have on communities such as Grand Junction, Rangely and Durango that have economies centered around both energy and higher education.


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