Montezuma County recently opted into a lawsuit with six other counties against the state of Colorado, which passed a bill that permitted itself to transfer $25 million of severance tax dollars from local government funds to its general fund in a move to balance its budget.
Mesa County is spearheading the suit. The other counties involved – aside from Mesa and Montezuma – are Douglas, Garfield, Moffat, Montrose and Rio Blanco.
So far, the counties have filed a complaint.
It’s a request for a declaratory judgment, which essentially asks the court to say whether the state taking this money goes against a statute that says such funds “shall be distributed” to counties impacted by mining operations.
The counties are focusing on a mandate that says, “Seventy percent of the funds from the local government severance tax fund shall be distributed to those (impacted) political subdivisions.”
Colorado’s severance tax, enacted in 1977, is collected “on the nonrenewable natural resources removed from the soil of (Colorado) and sold for private profit,” according to law that the counties cited.
The idea was to “recapture a portion of this lost wealth” and “provide a source of revenue to the state and its political subdivisions.”
Though it’s not the first time the state has taken from this fund, it’s the most recent and most significant, said Montezuma County Attorney Ian MacLaren.
“We wouldn’t have filed if we didn’t think the state taking these steps wasn’t fair,” said MacLaren. “We rely extensively on capital from that fund.”
Last year, severance tax money boosted Montezuma County’s general fund by $619,243, and in 2022, by $521,412.
It’s unclear whether the amount the state took will exhaust the Local Government Severance Tax Fund.
What is clear, though, is that all seven counties in the suit have benefited from severance tax dollars in the past.
“The Plaintiffs will be deprived of critical funds on which they have come to heavily rely, and on which they intended to rely,” as quoted from the filed complaint. “Their communities will face severe impacts as a result.”
If nothing else, filing in the suit is a strong political statement. In the future, maybe the state will think twice before taking money from the fund, MacLaren said.
