July 3, 2008

Bid To Raise Severance Could Spark Nasty Battle

The Daily Sentinel

By MIKE SACCONE
May 04, 2008

Should backers of a severance tax increase succeed in placing their measure on the November ballot, Colorado could be in for a caustic and costly fight akin to one fought in California two years ago, according to political observers in both states.

Larry Gerston, a political science professor at San Jose State University, said no matter how popular a severance tax increase might be, the energy industry will throw everything it has into winning the fight.

“I think you can expect the industry to fight it tooth and nail,” Gerston said.

In a bid to raise more money for renewable energy initiatives, conservationists pushed a $4 billion severance tax hike onto California’s 2006 ballot.

From there, the state’s oil producers and environmental groups battled a multimillion-dollar media campaign, culminating in the electoral defeat of the ballot measure, Proposition 87.

“I think California is the roadmap to (defeat) a tax increase on an industry, and the effort that will be put into defeat this gratuitous taxation,” said state Rep. Cory Gardner, R-Yuma.

A severance tax measure likely to appear before Colorado voters this year would set aside a portion of the estimated $200 million it could raise for renewable energy programs. The bulk of the new money, however, would flow to “Colorado Promise” scholarships.

Elise Jones, executive director of the Colorado Environmental Coalition, said she is confident Coloradans are dissimilar enough from Californians to allow the ballot battle here to play out to a different end.

“Sure, there’s lessons to be learned, but we’re in a fundamentally different place,” Jones said. “It’s not like we’re going to outspend the oil and gas industry on this effort, but what we have on our side, I think, is the hearts and minds of the Colorado voters.”

Gertson said polling at the beginning of California’s 2006 election cycle showed most Californians were supportive of a severance tax increase. The tide turned, he said, after the industry shifted its media campaign into high gear.

He said once the industry began warning of skyrocketing fuel prices and suggested that businesses could pull out of California, public sentiment began to swing against the ballot question.

According to the California Secretary of State’s Office, voters there in 2006 defeated Proposition 87 by a 55-to-45 ratio.

Campaign finance records show, during the 2006 election cycle, opponents of the ballot measure spent nearly $93 million to defeat the measure.

Proposition 87’s supporters, the same records show, spent $61.3 million.