West Slope lawmakers bemoan raid on severance tax
Few lawmakers are happy with what’s in the Legislature’s proposed $26.8 billion budget for the next year, particularly those on the Western Slope.
While some say the budget is balanced as well as it can be, others criticize it for how that balancing came about. For one thing, the budget uses $45.7 million in severance taxes meant for the Department of Natural Resources and Department of Local Affairs to balance the budget, $22.8 million of which would have gone to local governments.
That money had been set aside last year to help pay refunds to oil and gas companies who were overcharged on the severance taxes they paid. But instead of putting it back where the tax is intended to go, it went to the general fund to help pay for other services.
“I know that we are in a budget season that is making tough cuts, tough decisions, but once again the budget will be balanced on the back of a severance tax sweep, and that impacts some communities more than others,” said Sen. Kerry Donovan, D-Vail, whose district includes Delta County.
Members of the Joint Budget Committee who drafted the budget for the next fiscal year, which begins July 1, said the move is regrettable but necessary.
“We assure you that the Joint Budget Committee actually looked at some much larger numbers for severance tax because we were looking at several hundred million dollars — $600 million to $700 million — that needed to be adjusted to balance the budget overall,” said Sen. Kevin Lundberg, R-Berthoud, a member of the JBC. “This was seen as the minimal impact (on severance taxes) that we could still afford to put into place.”
That decision didn’t’ sit well with Western Slope lawmakers.
Sen. Don Coram, R-Montrose, said in recent years, the Legislature has taken about $400 million in severance taxes, money Donovan said has yet to find its way back into local governments’ hands.
“They just get swept and they’re gone,” she told her fellow senators. “The number of times that we have done this, that the dollars never get returned to these communities, and then we say, ‘Well, it’s not as bad as it could be.’ This is a very frustrating message to have to explain at town halls. I would love for some of you to come join me because it’s a different conversation than other people hear at town halls.”
The cuts also impacted funds intended for Parks and Wildlife’s aquatic nuisance species eradication program, but the JBC found a way to restore that fund in another bill.
The budget included a few other things that rural Colorado isn’t expected to like.
Rural hospitals are expected to see a cut in the money they get from the hospital provider fee program, which is used to fund health care for the poor.
To help free up some money, and prevent the state from having to come up with additional funds to pay refunds because revenues exceeded the cap established under the Taxpayer’s Bill of Rights, the JBC cut that hospital provider fee program by about $264 million.
When the budget bill was debated in the Senate last week, senators managed to get rid of a proposed 3.15 percent pay raise for workers in the Judicial Branch. Because the Legislature tied its own pay raises to those of the judiciary, approving that would have meant a raise for themselves.