Economy may put brakes on grants

After a hiatus of over a year, it was heartening to hear that state funds designed to help communities deal with the impacts of energy development could begin flowing once more in Colorado during the fiscal year that begins July 1.

The spigot on those funds was clamped shut as state lawmakers struggled to deal with continuing budget shortfalls.

Unfortunately, it doesn’t appear that the budget situation is improving as quickly as state officials had hoped.

State budget forecasters told lawmakers on Monday that there is insufficient money to pay the bills for this fiscal year and the new fiscal year beginning July 1.

According to the Associated Press, “On Monday, Gov. Bill Ritter’s budget analysts told lawmakers the governor is going to be forced to declare a fiscal emergency, giving him the power to cut $75 million from next year’s budget after this year’s budget failed to meet a 2 percent reserve requirement.”

It is expected that Ritter will extend cuts he and the Legislature already have made, carving nearly $2 billion in spending from the state budget over the past three years. That includes cuts to public education, more furlough days for state workers, elimination of tax breaks and delays for some nonessential state programs.

It’s hard to fault the governor and Legislature for using cash from the energy impact fund, along with money from other state reserve funds, to help reconcile the state budget. It’s fair to say that the economic pain has been spread across the spectrum of state interests — from senior citizens who lost a property-tax exemption to public schools that saw cutbacks in their per-pupil funding.

Even so, it was welcome news that the Colorado Department of Local Affairs was tentatively hoping to offer $76 million in energy and mineral impact grants in the coming fiscal year.

The revenue for that fund comes from state severance taxes on oil, gas, coal and other mineral development in the state, along with federal mineral lease royalties on public lands in Colorado. It is only reasonable that it should be returned in large part to the counties and towns that experience the greatest impact from that development.

In the past decade, that has meant more money flowing to northwestern Colorado than any other part of the state so the region could respond to the impacts of natural gas drilling and production. Roads, bridges, water and sewer systems, schools, libraries and parks have all benefitted from the funds.

However, state authorities said the availability of $76 million for energy-impact grants in the coming fiscal year would depend on the state of Colorado’s economy and whether legislators believe they must tap into the impact funds once again to balance the budget.

The latest economic news out of Denver this week isn’t promising in that regard.


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