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Oil and gas producers: vital source of school funding: education officials mull impact of proposed bans.

Colorado's oil and gas industry contributed more than $1.6 billion in public revenues last year, including almost $500 million to education. Initiatives to ban or impose moratoriums on hydraulic fracturing have some public officials and educators. concerned about the impact this would have on school finding.

"If you look at assessed values and tax revenues that are generated from oil and gas development, anywhere from the actual production and sales to the reclamation, the capturing of the natural rest resources, drilling and mineral leases, there's a lot of money that's generated for education in this state," says Chad Auer, the mayor of Firestone who works for the Colorado Department o1 Education implementing major improvements in school districts with low accreditation scores.

Auer says he worked with the Weld County Assessor's Office to come up with his estimate that the Greeley-Evans School District 6, representing 20,000 students has received about $11 million from energy developers in the past two years.

"The example of Greeley is pertinent because it's right in the middle of Northern Colorado and the heart of oil and gas development," he says. "At id Firestone obviously is near Greeley, so it made sense."

More than 90 percent of oil and gas wells today are fracked at some point, during their lifespan. Imposing moratoriums or bans on the practice, as some Colorado communities have proposed doing, would impact education funding throughout the state, not just energy-producing counties. Auer says.

"If you hurt oil and gas development then you are very practically reducing tax revenue that comes from that, and those tax revenues are used in part to Fund schools," he says. "There's a certain amount of tax revenue that comes from oil and gas development that go into a statewide bucket and then it's distributed out to every community in the state on a Formula based on population, need, etc.

"Well, those communities that want to go for a moratorium--there's never any discussion about also then surrendering the benefit they get from oil and gas development. It's one of those things where I think they haven't thought it through and the economic impact in very real terms when it comes to what their cities get and also in terms of how oil and gas contributes financially to education in this state. It's a very significant amount of money."

Oil and gas revenues that find their way to schools come from other sources as well. Counties with federal land where commercial activities are conducted, such as oil and natural gas leasing, livestock grazing and logging, are compensated by what's known as the PILT program (payment in lieu of taxes). This year, payments collected by the Department of the Interior and distributed to 56 Colorado counties will total $31.7 million. That money helps rural communities provide critical services such as police, fire protection, emergency response, and public education.

Mesa County will receive $3.1 million this year from the PILT program, the most of any county in Colorado. That's about double what Mesa County received last year because of federal sequestration cuts.

"It varies from year to year, but it's a fairly substantial amount and pretty important to Western Slope schools," says Marcia Neal, vice chairperson of the Colorado State Board of Education who lives in Grand Junction. "It's independent of state Funding, so if they need to build a building or do a project or something like that they can use that money. And it's been very helpful and valuable to us in the past."


"Oil and gas certainly as an industry has been a huge contributor to our local public education.

"I think it's a wholly defensible position to say, 'When you go to war against oil and gas development, you're indirectly going to war against an important source of education funding in the state.' I don't think a lot of people think that through.

"I watched the initiative that went through in Longmont last year [banning fracking]--I just shake my head and I worry about our state. I worry about the future."

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Comment:Oil and gas producers: vital source of school funding: education officials mull impact of proposed bans.
Geographic Code:1U8CO
Date:Nov 1, 2013
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