With Amendment 58, Energy Prices on the Ballot in Colorado

Energy prices are a hot-button issue all over the United States this election year, but nowhere is the issue quite as complicated or controversial as in Colorado.

Of a record 18 ballot issues, none has generated the spending, ads or chatter of Amendment 58. The measure would end a tax credit for energy companies. Oil and gas companies currently pay low severance taxes, or taxes on minerals "severed" from the ground, because of a property tax credit created about 30 years ago. The credit was created to level the playing field across Colorado counties, so that energy companies could pay the same amount of tax in every county.

Amendment 58 would end this tax credit. The state government estimates the energy firms would pay an additional $300 million in state taxes if the measure were passed.

The majority of the additional revenue is earmarked for new scholarships for low- and middle-income students at Colorado colleges and universities. The rest of the money would be spent on renewable energy projects and wilderness areas, as well as mining remediation programs in areas with heavy oil and gas impacts.

I have been studying Colorado ballot measures for many years, formerly as a newspaper editor. I am generally averse to constitutional amendments. They generally regard very narrow issues that should not be part of the permanent state constitution. However, previous amendments themselves have created a complicated situation whereby nearly any change to state taxes must be handled in a constitutional amendment.

Therefore, ending this tax break for energy businesses must unfortunately be handled in an amendment, so Colorado voters should approve this measure. The additional tax revenue is targeted for good causes, so it is hard to argue that the expanded state coffers will just promote wasteful government spending.
The main argument against the amendment is that the higher tax burden will drive energy companies out of the state or even across county lines into counties with lower property taxes.

However, this argument is specious at best. In the current energy economy, domestic producers will drill for oil, natural gas or any other carbon source anywhere they can. An oilfield is not like a factory. It cannot be simply outsourced. It is based on proven reserves in the ground.

Colorado's oil and gas companies aren't going anywhere, but even if the tax change generates less than the expected $300 million, it will still raise important money for college scholarships. Ideally, Colorado will be at the forefront of a new energy economy. By creating more opportunities for college students, we can create more opportunities for new green-collar workers.