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Severance taxes disperse in Colorado

Severance taxes and energy royalties will provide more than $150.6 million for projects in Colorado, according to a recent Colorado Biz Journal article. Gov. John Hickenlooper announced Monday that $150,632,084 in grants will be awarded to 549 projects throughout the state.

The funding, which was provided by the Energy and Mineral Impact Assistance Fund, comes from fees oil and gas companies pay to mine resources on federal land. The money will be used for projects such as renovations to public buildings, libraries, and improving water systems.

“This grant program is a valuable tool for Colorado’s smaller and rural communities,” Hickenlooper said in the article. “With these funds, communities are able to plan for and implement substantial capital improvements, essential public projects and other services.”

Non-oil county funding falls short

It’s no surprise that counties in Colorado pull in a significant amount of funding in severance checks; in 2014, Teller County was granted $397,601.08, while Weld County’s haul totaled more than $10 million, according to a recent Colorado Springs Gazette article. For counties such as El Paso, which host less oil and gas production, the amounts are more modest.

Last year, El Paso County split its $104,103.49 in severance taxes between nine cities: Colorado Springs received the most at $57,003.21 while Green Mountain Falls, which received the smallest amount, pulled in a whopping $85.81.

Each year, Colorado gathers taxes collected from all mineral operations within the state and divides them amongst its 64 counties. The amount each county receives generally depends on where oil industry employees live.

Because their tax severances tend to be pretty small, cities like Manitou Springs, which was given $1,038.72, dump the amounts into their city funding. According to Rebecca Davis, the city’s financial director, an amount that small won’t make much of an impact on the city’s $6 million budget for 2015.

“They usually just go into our general fund,” she said in the article. “You know, because they are too small of funds to really fund (anything).”

Hickenlooper shifts use of Mesa County funds

While some counties accepted relatively small severance taxes, Mesa County braces for Gov. Hickenlooper’s proposition for the use of theirs. According to a KJCT 8 article, Gov. Hickenlooper proposed that Mesa County’s funds go toward balancing the state’s budget.

The county would otherwise use its $1.7 million in severance taxes to fund services such as public safety and first responders. Opponents of the shift in use argue that the money is needed to reconcile the impact from oil and gas production.

“It will have a huge impact on Mesa County,” Rose Pugliese, county commissioner, said in the brief. “Especially during a time where we are not recovering economically, the way front range and other counties are recovering.”

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