Diverted state funds cost local jobs, legislative panel is told
Colorado News Agency
Glenwood Springs, CO Colorado
DENVER, Colorado – An estimated 25,000 jobs that would have been created, had the state not diverted $1.3 billion in grant money allocated to fund local infrastructure, have been forfeited, says the Colorado Municipal League.
Particularly hard hit, says the league, have been rural communities throughout Colorado.
In 2007, 381 projects and $40 million in grant money were floated by the Severance Tax Cash Fund, which is funded by taxes on energy and mineral extraction. Yet since 2007, the account has been used to help fill in gaps in the state’s operating budget, with only 96 infrastructure projects funded by $3 million in grant money.
In 2011, the grant program was suspended, with virtually all the money diverted to the general operating budget amid overall plummeting state revenue.
Sam Mamet, the league’s executive director, addressing the legislature’s Water Resources Review Committee on Wednesday, said the grant money was the cornerstone of infrastructure projects, especially in smaller communities, serving as a solid base of funds to be supplemented as needed with user fees and bonding.
The league, which is the principal statewide lobbying group for Colorado’s city governments, speculates that the $1.3 billion in lost grant money since 2007 translates into approximately 25,000 jobs lost.
“The loss of these grants, the construction work, and the jobs that go with it … this is a critical area for the entire state, but I worry about rural Colorado,” said Mamet.
Speaking for the Colorado Contractors Association at the water review meeting, Tony Milo said unemployment in the construction industry hovers around 20 percent, and funding the suspended projects could take a chunk out of the industry’s unemployment numbers.
“The sooner we can fund these infrastructure projects, the sooner we can put Coloradans to work,” said Milo. “Funding these projects will create jobs.”
Michael Brod, executive director of the Colorado Water Resources and Power Development Authority, suggested funding alternatives to the panel. One, he said, is to increase water bills in communities that lack bonding capabilities or other revenue sources, although he conceded there could be obstacles to those approaches.
“You may increase their rates two, three or five times,” said Brod. “In some places there are folks leaving the communities and there’s a smaller base to spread the costs over, so that’s going to be a challenge and I think we’re going to see more of that.”
Sen. Gail Schwartz, D-Snowmass Village, pointed to another possible funding option for upgrading infrastructure, one that has been employed for building schools in smaller communities lacking large numbers of taxpayers.
“Somewhat of a model might be like the school bonding program where we look at their (the district’s) capability to bond, and what they were capable of paying, and the state backfilled in order to build the new schools,” said Schwartz.
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