Ritter Administration Announces Severance Fund Grants to Local Governments

September 3, 1:10 PMColorado Statehouse ExaminerHank Lacey

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The Ritter administration announced Wednesday that more than 500 cities, counties and school districts across Colorado will receive about $80 million in grants funded by severance taxes generated from oil and gas extraction.

The purpose of the grants, which were calculated under a more generous allocation formula created by a 2008 law, is to "offset impacts from energy development, strengthen local economies and improve the livability of Colorado communities," according to a press release from Gov. Bill Ritter's office.

“These funds come at a critical time and will help local agencies and schools maintain quality services,” Lt. Gov. Barbara O’Brien said. “These direct distribution awards will allow local officials to decide how best to invest these funds and make the biggest difference in their communities.”

The amount of the grants is a state record. Prior to the enactment into law of SB 08-218 and HB 08-1083, grants from energy severance taxes and the federal government's mineral lease fund were based on the number of employees an energy company had in a particular community. The 2008 statutes require consideration of the number of drilling permits, amount of production, employee residences, population in the community, and the amount of highway user miles in a community.

The total of the grants last year was about $24 million.

Colorado's severance tax on oil and gas drilling accounted for $44.5 million of this year's grant fund, while the federal mineral lease fund is the source of the remaining $35.9 million.

The largest recipients of grant money from the state's severance tax were Mesa county (about $4.7 million), Garfield county (about $4.6 million), Weld county (about $2.7 million) and the city of Grand Junction (about $2.1 million).

Grants to school districts, and additional grant money for municipalities and counties, come from revenues generated by the federal government's mineral lease fund.

About $2.8 million is being provided to school districts from the federal revenues, with the largest recipients being Garfield School District RE-2 (about $454,000), Roaring Fork School District RE-1 (about $377,000) and Mesa County Valley School District 51 (about $306,000).

A complete list of recipients, and the amounts they received, can be found here.