A Republican's bill expected to be introduced soon in the Legislature proposes a severance tax break for companies that set up new oil and gas wells in Colorado, but, after that, tax money from those wells would be pumped into higher education.
The tax revenue down the road would provide an alternative revenue source for Colorado's cash-strapped colleges, including the University of Colorado.
State Rep. Ray Scott, R-Grand Junction, said his bill would benefit Colorado's economy by attracting companies and jobs to the state. Additionally, it would set up a new revenue stream for colleges and universities, which have been the subject of budget cuts in recent years.
He said the additional revenue -- directed to the state's College Opportunity Fund -- could help curb rising tuition costs for Colorado college students.
Scott, who provided the draft of his Energy, Jobs and Higher Education Act to the Camera, said he expects strong opposition from the House Health and Environment Committee.
But, he said, his bill is about making smart business decisions and luring companies to Colorado with incentives, while providing a way to better fund colleges.
"Colleges are looking for some kind of consistency -- something to hang their hats on," Scott said.
There are too many variables to determine how much revenue the measure, if passed, could create for higher education. Those factors include well production and how many companies take advantage of the exemption.
The bill would exempt energy developers from paying severance tax on the first two years of production for new wells established between July 1, 2013, and July 1, 2015. After the exemption period ends, Scott's bill then directs tax revenue from the newly created wells to the College Opportunity Fund for their entire production life.
"I applaud his creativity for finding an alternative revenue stream for higher education, though I'm not sure this is the right source," said state Rep. Claire Levy, D-Boulder.
She said she was reluctant to comment further until the bill is introduced.
Gov. John Hickenlooper has proposed an extra $30 million for higher education in the next fiscal year, about $9 million of which would go to CU's campuses.
Now, the CU system receives $141 million from the state, which is less than 6 percent of its total budget.
"We haven't seen the bill, but we're always interested in ideas for getting more money into higher education," said CU system spokesman Ken McConnellogue. "We'd have to study this in more detail."
Contact Camera Staff Writer Brittany Anas at 303-473-1132 or email@example.com. ___