Severance tax, sage grouse top NW Colo. concerns |

Severance tax, sage grouse top NW Colo. concerns

Jerimie Richardson
Citizen Telegram Contributor

Balancing the demands of state environmental regulations against the problems and needs of the energy industry dependent Western Slope was the prevailing theme Saturday when Lt. Gov. Donna Lynne visited Rifle for a meeting with northwestern Colorado officials.

Though the discussion was cordial, the chief complaints from local leaders in attendance involved how to sensibly implement federal protections for the greater sage-grouse, as well as mitigating the negative effects of the state’s steep decline in severance tax revenues from local energy businesses and federal mineral leases as natural gas and oil continue to dwell on the bust end of the price curve.

In Moffat County it’s the federal effort to protect the habitat of the greater sage-grouse that gives area ranchers and energy developers the most grief.

“We got a form letter that ignored all our recommendations about sage grouse habitat,” said Jeff Comstock, Moffat County natural resources director. “Ninety percent of Moffat County is not habitat.”

Regarding severance taxes, a tax levied on mineral and natural resource extraction and production, Parachute Mayor Roy McClung spoke the mind of the room when he articulated the unique problems of small Western Slope towns that depend on the energy industry.

“The town of Parachute is perhaps the most impacted small town for energy,” he said. “Having those funds come back locally are extremely important for small communities. I wish I could tell you that we’re building some real fun, beautiful art projects, but the reality is we’re just trying to keep our streets and bridges together. Without government grants to help us diversify our economy, we’re having a really hard time drawing people to the area.”

Last month, the Colorado Department of Local Affairs announced it had paid $37.9 million in annual state severance tax and federal mineral lease direct distribution to government entities throughout the state. That sum, which was from revenues collected from July 2015 through June of this year, was a significant decrease from the $73 million distributed in 2015 — a fact DOLA attributed to low commodity prices.

In Garfield County, local governments, particularly those in the western part of the county, have had to adjust for lower than expected payouts tied to energy development. And as those jurisdictions head into budget season for 2017, there is a feeling that payouts will continue to shrink next year.

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