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Newspaper Article

    Proposal Would Give Oil, Gas Revenue To Customers

    02/10/2006
    on 2/10/06.

    DENVER - Voters could be asked this fall if they want to use some of the money flowing into the state from the booming energy industry to help them pay rising heating bills.

    Two small-government activists, including Independence Institute president Jon Caldara, have proposed a constitutional amendment that would take any severance taxes collected above about $200 million and cut a check to every utility rate payer in Colorado based on how many children and other dependents they list on their tax returns.

    The first check would be sent out in October 2007, with an estimated average payment of $16.

    Severance taxes are collected from the oil and gas industry, and half of the revenue is returned to cities and counties to help them deal with the impact of the extra traffic and people that goes along with that development. Most goes to the Western Slope, and both Republicans and Democrats from the area say they'll fight a proposal they see as an assault on rural Colorado.

    "Jon Caldara may fancy himself as a big-city Robin Hood but this feels more like highway robbery," state Rep. Josh Penry, R-Grand Junction said Thursday.

    Caldara couldn't immediately be reached for comment. He led the campaign against Referendum C, which allowed the state to keep about $4 billion in tax refunds over the next five years.

    Co-sponsor Beth Skinner of Colorado Freedom Works said energy companies are paying more taxes because energy prices are so high and they're passing that onto consumers.

    "It's only fair that if the state is reaping the benefit of this windfall, families should get something back," she said.

    The proposal would calculate the amount taken in during the calendar year 2005 and adjust it for inflation and population growth. Half would still go to cities and counties but anything above that 2005 figure would be distributed to utility customers. No checks would be cut if the payout to a single person without out dependents was less than $5.

    Rep. Bernie Buescher, D-Grand Junction, said the town of DeBeque recently applied for a grant to rebuild a bridge that leads to an energy development area. For 40 years it used to carry just pickup trucks, but now about 1,000 heavy duty trucks are crossing it every month.

    Penry said communities need that money to help them deal with the inevitable bust inherent in the energy industry.

    Severance taxes have been growing since 2003 as energy production has increased in Colorado. In the fiscal year ending June 30, legislative analysts expect $242 million to come in, an increase of 59 percent from the last fiscal year. The governor's budget office is more conservative, expecting $200 million.

    Legislative analysts expect the amount to decline to about $123 million in fiscal year 2010-2011.

    The taxes are now divided between the Department of Local Affairs, which gives out grants to affected cities and counties, and the Department of Natural Resources. Half of that half goes to water projects and the other half is used to run the Department of Natural Resources.