Housing initiatives, building remodels, road maintenance and other infrastructure often are paid for with grants from the Colorado Department of Local Affairs, but the department’s funding pool is expected to be a bit dry next year.
DOLA representatives recently met with local officials to discuss 2017’s projected shortage of grant money, which plays a critical role in projects throughout the county.
DOLA, along with the Department of Natural Resources is a beneficiary of severance taxes, which are levied on oil and gas companies at the point minerals reach the surface. The taxes are based on value, not quantity.
In previous years, those taxes have translated to as much as $30 million in grant money DOLA distributes to local governments. But because of a Supreme Court ruling this year, oil and gas companies can deduct more in taxes than previously.
“We’ve returned $30 to $40 million to oil and gas companies,” said Irv Halter, executive director of DOLA. “By year’s end, we’ll have taken about $100 million out of the general fund to repay severance tax receipts.”
Halter said that by working with legislators, the entities decided that out of $57 million in reserves, $31 million will replenish the general fund while the remaining $26 million will be appropriately divided between DOLA and the Department of Natural Resources at the end of the fiscal year.
The practical effect: DOLA distributed a mere $9.3 million in its most recent grant cycle, though the state received $20 million in requests.
Governments also can request up to only $1 million per grant cycle now, whereas $2 million previously was the maximum.
The county routinely applies for DOLA grants, which fund projects including road repairs and building remodeling, such as the renovations underway at the county courthouse.
“Our current projections are that we have $10 to $12 million coming in for the next two grant cycles combined, so we decided to combine the spring and winter cycles,” Halter said.
The next application deadline is in February for funds that will be distributed in May. La Plata County intends to apply for a grant to improve County Road 120.
“The good news is we’re not in as dire a position as we thought, if the projection is correct,” Halter said.
“Of note, the oil and gas receipts are projected to go up, which is good, but we don’t grant funds on projections, or we can get ourselves in big trouble. And I don’t want to make a promise to a community we can’t keep.”
