Report: Not enough funds for Colo. water projects

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Colorado doesn’t have enough money to fund a backlog of water projects and meet future water needs, according to a report by a Denver public policy research firm.

Colorado has relied on mineral severance taxes to fund water projects, but some of those funds were diverted to other uses as the state sought to balance its budget for the past two years, Dick Brown of San Dollar Research said in his report.

Brown’s clients had asked him to research how increasing mineral severance taxes or changing the distribution of revenues would affect water projects, The Pueblo Chieftain reported.

He concluded water managers should not look to the state for primary funding commitments for projects. He also said that state elected officials don’t have the resources or time in office to develop long-term capital financing programs for water projects, and that the water community must work to make sure more state funds don’t shift to other priorities.

Brown released his findings to selected parties via e-mail, The Pueblo Chieftain reported. The newspaper didn’t name the parties. Brown said his report is not an attempt to gain new sources of funding for water projects, but a means of “self-education,” he said.

Beyond paying for planned, multibillion-dollar water projects, the state has nearly $5 million in needs for an aging infrastructure. And the Colorado Water Conservation Board has forecast a municipal gap in water supplies by 2050 that state officials will have to determine how to fill.

The board has loaned more than $667 million for water projects since 1973, but its funds dwindled last year.

The Colorado Water and Power Authority also makes loans for water projects, using pass-through federal funds, which Brown did not study.

Up to 5 percent of state severance tax revenues go to the water conservation board, which is among several agencies that share federal mineral lease payments.

In the past 10 years, the amount generated by the taxes has ranged from $31 million in 2000 to $285 million in 2009. Brown attributed most of the revenue growth to oil and natural gas development.