RBC to join Mesa and Montrose counties in lawsuit over severance tax funding
RBC | In a special meeting held Monday, July 29, the Rio Blanco County Commissioners approved a resolution authorizing the county attorney’s office to join a lawsuit against the State of Colorado alongside Mesa and Montrose counties. Garfield County is still considering whether to participate.
At issue is a state house bill passed in May 2024 that increased the maximum amount the general assembly can appropriate from the severance tax operational fund to the conservation district grant fund from $450,000 to $700,000. The act made the following one-time transfers: $18,259,805 from the severance tax operational fund to the general fund on June 30, 2025; $26,086,559 from the severance tax perpetual base fund to the general fund on July 1, 2024; and $25 million from the local government severance tax fund to the general fund on July 1, 2024. The act also appropriates $250,000 from the severance tax operational fund to the department of agriculture.
Severance tax funds mitigate the impacts of oil and gas activity in local jurisdictions, as well as funding activities for the Colorado Water Conservation Board, the Division of Parks and Wildlife, the Colorado Avalanche Information Center among other related agencies.
A March 24, 2024 article from Colorado Politics, during the legislative session, stated: “The use of severance taxes to balance the budget is an old JBC [Joint Budget Committee] trick that goes back at least 20 years, often to the dismay of rural lawmakers, the communities that rely on those dollars to mitigate the impact of oil and gas activity and the dozen state programs that also depend on those dollars, including in parks and wildlife, water and other natural resources areas.”
The appropriated severance tax funds will “cover ongoing capital development projects that are already underway” around the state.
Rio Blanco and other counties annually receive severance tax funds in return for mineral and mining activities in their counties. The potential loss to Rio Blanco County is $1.3M, according to County Attorney Don Steerman.
Steerman said joining the suit makes “a very strong political statement,” but that the risk to the county is minimal.
“Rio Blanco County is unique in that 73% of the county is federally owned, only 2% is state,” said Commissioner Ty Gates. “It’s not our responsibility to balance the state’s budget.”