Severance tax funds running low as source for state’s water plan

If Colorado’s state water plan is to keep the headwaters state in control of its lifeblood, the plan will require a new spring of cash to replace one that is running dry, officials said Friday.

Where the money will come from — and ideas run from mill levies to sales taxes to tap fees to usage fees — isn’t clear, state Rep. Don Coram, R-Montrose, said at the Colorado River Water Conservation District’s annual seminar at Two Rivers Convention Center.

The state’s severance tax was anticipated to be a major source of revenue for the water plan, which was drafted to encourage water conservation as well as pay for water storage.

Severance taxes, however, have shrunk as oil and gas revenues have fallen in the face of dropping prices and as coal production has slipped.

The plan has twin goals of conserving 400,000 acre-feet of water while also storing an equal amount by 2030, when the state would otherwise come 560,000 acre-feet short of the expected demands of residents and businesses.

That amount is more than half of the maximum volume of the state’s largest body of water, Blue Mesa Reservoir, which can hold 940,000 acre-feet of water.

Coram said he floated the idea of charging 25 cents per 1,000 gallons of water on delivery to homes and businesses, to get people talking.

“I don’t know what the answer is, but I know doing nothing is not going to get things done,” Coram said.

Early projections called for the state severance tax to account for $3 billion, but that reservoir of cash is unlikely to refill soon, said James Eklund, executive director of the Colorado Water Conservation Board, which drafted the water plan and is charged with carrying it out.

It could take two to four years to determine how best to fund the plan, Coram said.

“We’re moving forward as aggressively as possible to implement this plan,” Eklund said.

Among the water plan priorities for the coming year are establishing a repayment guarantee fund with $50 million as needed to underwrite water projects; $10 million for the water supply reserve fund; $10 million for programming for the water plan and $5 million for the watershed restoration program.


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