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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Gordon A. Langston who wrote (150193)	6/2/2001 12:50:16 AM
From: puborectalis	Respond to of 769670

Colo. gets gusher in energy taxes By Steve Raabe Denver Post Business Writer Friday, June 01, 2001 - Sky-high energy prices have nearly doubled Colorado's natural-resource tax collections this year. Receipts from the severance tax, imposed on energy and mineral production, totaled $55.6 million in the first 10 months of fiscal year 2000-01, compared with $29.1 million in the same period last year. The jump comes largely from soaring natural gas prices, which produced more tax revenue. The average well price of natural gas nearly quadrupled nationwide last year, going from $2.12 per thousand cubic feet in January 2000 to $8.06 a year later, according to the U.S. Department of Energy. The price now hovers around $5. Despite the increase, state officials said the tax has given Colorado less of a windfall than in other energy-producing states because Colorado politicians decided years ago not to become heavily reliant on a notoriously unreliable source of revenue. "We need to rely on more stable revenue sources to fund the functions of government," said Nancy McCallin, director of the Office of State Planning and Budgeting. While severance taxes from coal and molybdenum have been relatively stable, oil and gas taxes have shown big swings. For example, oil and gas produced $13.5 million tax revenue in 1992, then dropped to a virtual trickle of $1.6 million just two years later. Energy taxes account for a microscopic contribution - far less than 1 percent - to Colorado's annual budget of $13 billion. In contrast, Oklahoma's tax revenues from natural gas are projected at $507 million this year, more than 10 times Colorado's $45 million, even though Oklahoma produces only about twice as much gas as Colorado. Other states, such as Texas and Wyoming, also fund a large part of their budgets with severance taxes. Severance taxes in Colorado are split evenly between state and local governments. Half of the revenue is given to cities and counties in energy-producing areas to help mitigate the impact of drilling and production. The other half goes to the state government for development of water projects and to fund state agencies such as the Geological Survey and the Oil and Gas Conservation Commission. Earlier this year, Gov. Bill Owens and the legislature approved a bill to use $10 million in surplus severance taxes to help low-income Coloradans pay their heating bills. McCallin's budget office predicts that the severance tax fund will continue to show surpluses, perhaps up to $9 million by the end of the next fiscal year. It's likely to grow, officials said, because tax-receipt increases this year were primarily from higher natural gas prices, while future increases will be driven by more energy production. "My guess is we'll see pretty significant production increases in the next couple of years," said Ken Wonstolen of the Colorado Oil and Gas Association.