Press Release - Funds from Drilling Revenue
OFFICE OF GOV. BILL RITTER, JR.
FOR IMMEDIATE RELEASE
THURSDAY, APRIL 3, 2008
CONTACTS
Evan Dreyer, 720.350.8370, evan.dreyer@state.co.us
Ben Marter, 303.718.9864, ben.marter@state.co.us
GOV. RITTER, BIPARTISAN LAWMAKERS ANNOUNCE RAINY DAY AND ONGOING FUNDS FROM DRILLING REVENUES
Gov. Bill Ritter and bipartisan bill sponsors announced landmark legislation today that will create rainy day and ongoing funds dedicated to higher education and local communities most impacted by oil and gas drilling in Colorado.
Funding will come from bonus payments and royalties the state will receive from the federal government for energy development on federal lands within Colorado, known as Federal Mineral Lease revenues.
"In the past, the distribution of these Federal Mineral Lease payments has been governed by a confusing cascade with off-the-top cuts, overflows, spillovers, more allocations and more spillovers," Gov. Ritter said, joined by bill sponsors Sen. Gail Schwartz, D-Snowmass, Sen. Josh Penry, R-Fruita, Rep. Bernie Buescher, D-Grand Junction, and David Balmer, R-Centennial.
"Today, through a bipartisan effort, we are fixing this problem," Gov. Ritter said. "We are helping communities affected by drilling and mining. We are addressing construction needs at higher education campuses throughout the state. And we are creating rainy day funds for impacted communities and higher education."
With energy extraction booming in Colorado, Federal Mineral Lease revenues are projected to grow substantially over the next 10 years. Forecasts call for the state to receive $2.7 billion from 2008 to 2018.
Legislation introduced today calls for:
- Directing more than $1 billion to impacted communities over the next 10 years.
- Designating more than $650 million in future FML revenues to capital construction projects at colleges and universities around the state.
- Creating a rainy day fund by depositing half of any future lease bonus payments into a newly created Higher Education Maintenance and Reserve Fund. Interest from this fund will pay for higher-ed maintenance projects. In the case of a recession, this fund could be tapped to ensure higher-ed operating budgets are protected.
- Depositing the other half of any future bonus payments into a local government permanent fund for impacted communities.
- Directing more than $700 million to K-12 public education and more than $150 million to the Colorado Water Conservation Board.
"I'm so grateful to the many stakeholders who have been involved in this undertaking," Sen. Schwartz said. "We are standing on the cusp of an enormous opportunity to set aside money from our state's energy boom and to create lasting funds to address Colorado"s future needs in the event of an economic downturn."
"The real legacy of this bi-partisan legislation is that when the drilling stops, Colorado will have a substantial permanent fund to take care of the state's colleges, universities and impacted communities," Sen. Penry said.
"We've had repeated booms from mineral and energy development in this state for over 100 years," said Rep. Buescher. "This will be the first time we put something away for our children."
"This is an historic day," Rep. Balmer said. "We are creating a permanent revenue stream for impacted communities and higher education. Through this bill, we are creating a reserve tank that always will be riding with us."