Garfield gets $4.3M in energy money; should it be more?
2014 Energy Impact direct distributions for Garfield County governments
County - $2,587,406
Carbondale - $189,903
Glenwood Springs - $309,290
New Castle - $179,324
Parachute - $139,776
Rifle - $734,269
Silt - $175,378
Total: $4.3 million
Source: Colorado Department of Local Affairs
Local governments in Garfield County received $4.3 million in direct distributions from Colorado’s Energy and Mineral Impact Assistance Fund last year, plus several hundred thousand more in special grants that have been awarded locally since 2012.
But that figure could have been a lot higher were it not for a practice that’s being proposed again this year to divert some of the money from severance taxes on energy and mineral production to the state’s general fund.
Last month, Gov. John Hickenlooper’s office formally requested that the Legislature’s Joint Budget Committee consider setting aside another $47 million in severance tax collections to help offset money that could be lost if the state must offer taxpayers a refund this year.
Colorado’s Taxpayer’s Bill of Rights requires a refund whenever state tax collections outpace inflation and population, which could happen this year.
But severance tax funds intended to help local governments deal with the impacts of energy development and mining should not be redirected for anything other than that purpose, Garfield County Commissioner Mike Samson said.
“We have stated publicly and continue to do so that we are adamantly against the state using those funds for any other purpose,” said Samson, who also chairs the Associated Governments of Northwest Colorado board.
“Combined, we figure we have lost over $200 million on the Western Slope because of this practice,” he said. “It’s easy money, which is why they take it. But it’s not right.”
Associated Governments and Club 20, a coalition of West Slope governments and business interests, have both taken positions against the fund diversion, as have the Garfield and Mesa county commissioners.
Hickenlooper’s office last week touted the money that has been given to local governments, both in direct distributions as well as through competitive Energy Impact grants.
Since July 2012, more than $150.6 million in grants have been awarded to 549 projects across the state, after those funds were redirected for two straight years to offset state general fund shortfalls due to the economic downturn.
Most of those grants are used to address public improvements ranging from building renovations and road and bridge projects to libraries and water/wastewater systems.
Last year, the state also made more than $78 million in direct distributions to 507 local governments. And nearly $7.4 million was used to help with recovery efforts after the devastating Front Range floods of 2013.
“This grant program is a valuable tool for Colorado’s smaller and rural communities,” Hickenlooper said in a news release. “With these funds, communities are able to plan for and implement substantial capital improvements, essential public projects and other services.”
The Department of Local Affairs (DOLA) administers the grant program and direct distributions. Money comes from the state severance tax on energy and mineral production, and from a portion of the state’s share of royalties paid to the federal government for mining and drilling on federally owned land.
“Many local governments depend on these funds for essential public infrastructure, and we understand the importance this fund plays in helping to achieve community goals,” said Reeves Brown, executive director of DOLA and the former Club 20 director.
In Garfield County, Energy Impact grants during the past 10 years have assisted with projects ranging from water and wastewater treatment plants in New Castle and Rifle to Carbondale’s Third Street Center for nonprofit and community organizations.
“The Department of Local Affairs has assisted the city of Rifle on many capital improvement projects through the Energy Impact program,” Rifle Mayor Randy Winkler said. “DOLA recently provided grant funding to the city of Rifle for the construction of a wastewater treatment plant completed in 2009 and a new water treatment plant, which is currently under construction.
“Neither of these projects would have been possible without the financial assistance” from the severance tax funds, Winkler said.
Aside from the grant program, direct distribution of money to local governments is based on the number of production employees in the energy-impacted communities, as well as permits, production, population and how many miles of maintained public streets and roads a jurisdiction has.
Garfield County government alone received nearly $2.6 million in direct distribution funds for 2014. County Manager Andrew Gorgey said the money typically is directed into the county’s road and bridge budget for infrastructure needs, often directly related to oil and gas activity in the county.
Commissioner Samson said another concern for local governments involves discussion at the state level about changing the formula for direct distributions.
“That’s something we are watching very closely,” he said. “If they do that, we could get an even worse deal.”
Rifle Citizen Telegram Editor Heidi Rice contributed to this report.
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