<\/p>\n
Colorado water managers said Friday that a growing population and shrinking oil and gas revenues will leave the state with a water shortage and too little money to prevent it.<\/p>\n
The state\u2019s 5.3 million population is expected to double by 2050, creating a potential water supply gap of 560,000 acre-feet.<\/p>\n
The state plans to fill the gap through storage, water conservation and other efficiencies by 2030, at a cost of $20 billion, but it expects to have just $3 billion in hand.<\/p>\n
The Southwestern Water Conservation District hosted a conference titled \u201cSolving the Water Funding Puzzle\u201d at the DoubleTree Hotel in Durango to confront the budget crisis.<\/p>\n
Colorado\u2019s overriding challenge lies in how water management is funded, said Bill Levine, budget director for the state Department of Natural Resources.<\/p>\n
Much of the state\u2019s revenue stream for water-supply management is tied to federal energy, including severance taxes from the oil and gas industry, which exposes Colorado to the ebb and flow of the volatile oil and gas industry.<\/p>\n
\u201cWhen energy values drop, so does the revenue stream, so it is by nature volatile,\u201d Levine said. \u201cRevenue that is not tied to the energy industry is needed.\u201d<\/p>\n
Because of a weak energy market and a costly court ruling, the state\u2019s revenues from severance taxes dropped from $271 million in fiscal year 2015 to $67 million in fiscal year 2016.<\/p>\n
And in 2016, the state lost a lawsuit brought by British Petroleum over severance taxes. The state is refunding energy companies \u2013 $113 million so far \u2013 after the Colorado Supreme Court ruled that the companies qualify for a deduction the Department of Revenue had been denying them.<\/p>\n
State and local agencies have paid a price.<\/p>\n
The drop in revenues from federal minerals caused program budgets for the Colorado Water Conservation Board to drop from $14 million in 2015 to $8 million in 2016.<\/p>\n
The cuts wiped out funding for boat inspection programs needed to stop invasive quagga and zebra mussels, which has limited boating at McPhee Reservoir and Totten Lake in Montezuma County.<\/p>\n
Grant programs of the Department of Local Affairs also were cut, because they too depend on severance tax revenues.<\/p>\n
Severance tax revenues have funded the Southwest Basin Roundtable grant program that supports water projects in southwest Colorado. Funding will suffer, and there will be less grant money, said roundtable chair Mike Preston.<\/p>\n
In La Plata County, the basin fund helped to finance an inlet from Lake Nighthorse as part of a plan to provide municipal water for Fort Lewis Mesa, which includes the communities of Breen and Kline.<\/p>\n
It\u2019s been tapped to support a project improving water supply at Lake Durango, which serves Durango West communities. And the grants have supported an Animas River community forum, which is establishing emergency response protocols to protect water users in the event of a toxic spill such as the 2015 Gold King Mine disaster.<\/p>\n
\u201cNow the basin roundtable fund is static and heading down because it is not being replenished,\u201d Preston said. \u201cUnless we can find other funding sources, we will have to pull back on the number of water projects that receive grants.\u201d<\/p>\n
Several potential sources of revenue for water-related infrastructure and programs were presented at the packed conference.<\/p>\n
Emily Brumit, of the Colorado Water Congress, gave an update on legislative proposals and a ballot initiative that would support water-related budgets, including the struggling boat-inspection programs.<\/p>\n
For example, Senate Bill 259 proposes to replace lost severance tax revenues with $10 million from the general fund to support forest restoration, species conservation and boat inspection programs. House Bill 1321, introduced this week, would create a revenue stream through a sticker fee to fund boat inspection programs.<\/p>\n
And Initiative 20 focuses on oil and gas severance taxes. Its primary goal is to increase the severance tax rate, eliminate the severance tax credit that is based on property taxes, eliminate the stripper well exemption and require that a portion of severance tax revenue be paid for specific purposes.<\/p>\n
\u201cThere has been a lot of talk on aquatic nuisance species this legislative session,\u201d Brumit said. \u201cWe need to get innovative and create financial solutions with this severance tax issue and find a funding that is outside of energy production.\u201d<\/p>\n
Speakers emphasized efforts to find money to stabilize the budget.<\/p>\n
Legislators are considering asking voters to approve a container tax on beverages to raise $100 million to $200 million per year for water-related needs. A vote could end-run the Taxpayers Bill of Rights, exempting it from TABOR revenue caps.<\/p>\n
Other ideas presented at the conference included a new water fee paid by residential consumers, new water tap fees and new tourism fees.<\/p>\n
Looking at budgets with a longer view also is needed, said lobbyist Dick Brown.<\/p>\n
\u201cWe need to get away from annualized, episodic pay-as-you-go budgets,\u201d he said.<\/p>\n
\u201cThe state\u2019s water needs are in perpetuity, so the financing needs to be perpetual as well, but the state constitution does not accommodate that easily.\u201d<\/p>\n
Government specialist Christine Arbogast said the idea of private-public partnerships is popular for new money. But she does not believe they are a viable local solution locally.<\/p>\n
\u201cThe expected rate of return of 5-8 percent from private investors is too much for the tax base of smaller communities,\u201d she said.<\/p>\n
La Plata County Commissioner Brad Blake urged the crowd to take a long-term vision on solving the budget crisis, like previous generations did.<\/p>\n
\u201cWe have good water rights, but don\u2019t have a way to move it around well,\u201d he said. \u201cThe pioneers built dams, ditches and levees. Now we are tasked with looking ahead to provide water infrastructure in our area. We need more public involvement so we get all the help we need to overcome this monumental task.\u201d<\/p>\n