Colorado voters made it abundantly clear last week they didn’t like either of two measures that would have changed the state’s severance tax.
However, with a serious crunch coming in highway funding, the state needs to take another look at the severance tax and how it could help highways, while recognizing that the natural gas boom may be slowing.
Amendment 58, which would have eliminated a property tax credit that energy companies receive against their severance taxes, was shot down by roughly 58 percent of Colorado voters. It would have allocated most of the new funds to college scholarships.
Amendment 52, which wouldn’t have raised severance taxes but would have redirected some of the future revenue into highways, was killed by an even larger margin.
Now, two of the primary proponents of those two measures — Gov. Bill Ritter for Amendment 58 and Sen. Josh Penry for Amendment 52 — both say finding adequate money for highways will be a critical issue when the Legislature convenes in January. And both said that some change in the severance tax is likely to be one of the ideas considered.
A Blue Ribbon panel convened by Ritter last year argued that a minimum of $500 million per year in new money is needed to do necessary maintenance and improvements on the state’s highways and bridges. Instead, because of cutbacks in federal highway money coming to the state and projected reductions in state transportation funds, revenue for the state Transportation Department is actually projected to do just the opposite in the coming year — to decrease by $500 million.
Penry hopes there is a chance to consider a change in the severance tax next year, once new state rules on gas drilling are finalized and their impacts are known. He’s been talking with people in the energy industry about the possibility of a floating tax structure that is tied to the price of gas and oil. And, as The Daily Sentinel reported Sunday, Rep. Al White, R-Hayden, is already planning a new measure for the ballot to change the severance tax.
We hope that from the ashes of the two severance-tax measures killed last week, some agreement can arise that could help Colorado provide more revenue for one of its most pressing immediate needs — highways.