Grants To Northwest Colorado In Jeopardy

The money that the City of Craig and surrounding areas receives from severance taxes in the form of grants from the Department of Local Affairs, may significantly decrease this year if a bill before the Colorado State Senate is approved. Severance taxes are collected by the state from companies or individuals that produce nonrenewable natural resources such as oil, coal, or gas in the state of Colorado. This money has been used in the past to balance the budgets of the State. The proposed bill would prevent Colorado from using severance tax revenue for that purpose, leaving more funds to be used to support the areas where the tax was collected. However the bill also reclassifies who qualifies to receive this money which could negatively effect Northwest Colorado. The bill would prevent the Department of Local Affairs (DOLA) from giving energy impact grants to local governments that received less that $200,000 dollars from Direct Distribution in the prior fiscal year. Direct distribution is the process DOLA uses to distribute revenues that are derived from energy and mineral extraction statewide. The money an area receives is calculated based on its energy production levels from the past year. That would have a negative effect on small towns, because while small municipalities will be significantly affected by decreased energy production, they may not qualify for to received DOLA grants. If that were to occur and the City of Craig and Moffat County will lose a minimum of 60% of the money it receives from severance tax’s causing a massive drain on the budgets for the area. To address their concerns about the proposed bill, the Craig City Council sent a letter a sponsor of the bill, Colorado Senator Randy Baumgardner asking for changes to the bill.

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