Severance tax funds should be repaid
The legislature should repay the severance taxes it borrows to help balance the general fund budget.
To balance its general fund this year the legislature is looking at transfers from almost every one of its special funds, including a proposed raid on the severance tax funds. It is not clear whether the legislature will consider these transfers as loans or as a “taking.”
As a representative of local government in a region that produces most of the severance taxes, I believe the severance tax transfers should be considered a loan. These taxes were established more than 30 years ago for specific purposes, not to augment the state general fund. The severance taxes are assessed as an extra tax on mining, oil and gas operators for three specific purposes:
1. To help local governments deal with the impacts of mineral and energy development;
2. To help the state Department of Natural Resources with the regulation and administration of mineral resource activities, including the Colorado Geological Survey; and
3. To be held in a “perpetual” fund for the benefit of future generations, our kids.
Webster’s Dictionary defines “perpetual” as (1) lasting or enduring forever or for an indefinitely long time; or (2) continuing indefinitely without interruption. If the legislature takes these funds without repaying them they will be redefining the word “perpetual.” It would be like parents taking money from their kids’ piggy bank without repaying it. Would you do that? Of course not, and neither should the legislature.
The state’s economists are projecting a return to surplus revenue within a couple of years. The legislature should repay the severance tax funds as their first order of business when a surplus occurs.
Bill Dunham, Chairman
Associated Governments of Northwest Colorado
and Mayor, Town of Meeker
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