Department of Local Affairs announces payments of $37.9M to local governments

DENVER ­- Thursday, September 1, 2016 - The Colorado Department of Local Affairs (DOLA) today announced $37,901,770.15 in annual state Severance Tax and Federal Mineral Lease Direct Distribution payments has been made to 510 Colorado counties, municipalities, school districts, and federal mineral lease districts.

DOLA distributes revenue derived from energy and mineral extraction statewide. These revenues come from State Severance Tax receipts and Federal Mineral Lease royalty payments.This year's distributions are based on State Severance Tax and Federal Mineral Lease revenues collected from July 2015 through June 2016.  During this period for both revenue sources, significant decreases in mineral commodity prices compared to the previous 12 month period reduced the total 2016 distributions to less than half of the 2015's distribution of $73 million.

The 69 percent decline in the amount of State Severance Tax distributions were also cyclically impacted by the high ad valorem property tax credits claimed by oil and gas producers stemming from their property tax obligations from 2014’s high oil price environment.

For this year’s distributions to counties and municipalities, a 38 percent decline in Federal Mineral Lease revenues was partially offset by the General Assembly’s transfer of nearly $4.5M from the Local Government Permanent reserve.

DOLA is responsible for the distribution of these annual payments based largely on the number of energy company production employees living in Colorado’s communities each year.

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