Tuesday, February 1, 2011

Colorado Sen. Roberts wants to stop the raiding of severance tax proceeds

The days of back-filling the state budget deficit with federal stimulus funds are obviously coming to a close. And if one state senator gets her way, raiding some local cash accounts to back-fill the state’s operating budget may be coming to a close as well, creating added pressure on legislative budgeters and the governor to balance the books.

Sen. Ellen Roberts, R-Durango, realizes she may not win a popularity contest in the Capitol with Senate Bill 35 and House Bill 1123, nearly identical proposals that would prohibit the state government from transferring money from severance tax collections to the state general fund. Severance taxes are collected on the extraction of oil, coal and other minerals and gases. Once the state collects the severance taxes, the money is redistributed to local communities for water grants and other infrastructure upkeep using the “local impact fund.”

“We in the rural areas are team players, and we totally understand the concept of shared responsibility and shared sacrifice, in terms of damming the tough times. But we have come to the realization that by being team players, we’ve become, in a way, the fall guys,” Roberts told the Colorado News Agency. Instead of looking to make cuts in programs that have been newly created or expanded, we become the place people go to first … as if that money was just a piggy bank you could dig into whenever. That has been to our detriment.”

Sen. Mary Hodge, D-Brighton, said the bill’s intentions are good, but the fiscal realities faced by the state are too difficult to enact this bill now.

“I would say in an ideal world, in an ideal budget, those funds should probably go back into the communities that are affected. But, we’re not in an ideal world, and we’re not in an ideal budget, and in fact, the minerals that are extracted belong to the state of Colorado. They don’t just belong to individual communities,” Hodge said. ”This isn’t the time to say, ‘No more money coming out of the severance tax funds.’”

Hodge’s words carry special weight as she serves on the Joint Budget Committee.

“I haven’t talked with my caucus about it, but I would say most members of the Joint Budget Committee see it like I do,” Hodge said.

While Roberts says the issue is nonpartisan because of the variety of Democrats and Republicans who represent energy-producing areas in Colorado, she also acknowledges that winning votes in both parties may be difficult. If the severance tax funds aren’t transferred to the general fund, Roberts says cuts will likely have to come from K-12 education, or medicaid funding.

If Roberts’ bill were to pass, a total of $88-million would be prohibited from transfer to the general fund in fiscal year 2010-11, and $42-million would be prohibited from transfer the following fiscal year.

“I’ve been talking about this, including with Joint Budget Committee members and metro Denver legislators, and they understand it. They get it. There’s not been anybody who actually questions the merit of what this bill does. What they say is, ‘Well, these are tough times, and we have no other choices.’ My point is, we’re just kicking the ball down the field.”

Via - Colorado News Agency

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