WSP10086

• File Number: 8040.100
• Description: Section D General Studies - Power
• State: CO
• Basin: Statewide
• Date: 3/1/1976
• Author: HUD
• Title: Rapid Growth from Energy Projects - Ideas for State and Local Action
• Water Supply Pro - Doc Type: Report/Study

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the initial deficits. Rio Blanco would be ahead of
that schedule, but Mesa County (with impacts but no
oil shale projects) would never have a surplus.
If the money is available at the wrong time, there
must be a way to get it earlier. And if in the wrong
place, there must be a way to get it to the right place -
the place with the impacts. Why is it so hard to ac-
complish that result? In most States the answer is
traceable, at least in part, to historic issues in State
and local government relationships. Many States
impose limits on local tax rates, or on the revenues
available to local governments, limiting their ability
to respond to rapid changes in service demands.
Furthermore, much of the new housing - in the form
of mobile homes - does not go on the tax rolls, but
is taxed as personal property or vehicles. (Note that
both Colorado and Wyoming have recently changed
their laws to tax mobile homes in the same manner
as permanent structures.)
Unique taxation formulas often complicate the
problem. Some States, for example, impose debt
limitations based on a percentage of the assessed
valuation. Assessment practices may delay the entry
of the new energy project onto the tax rolls.
Long.term bonds for capital projects may be diffi-
cult to sell. Present residents may not approve them.
Buyers may be wary because of untested credit ratings
of small communities. In some instances, a case can be
made for corporate or State quarantees of such bonds.
Finally, there are limits on the money available in
all State and Federal programs, and there is little
emphasis on communities impacted by energy develop-
ment. To compound the problem of State and Federal
assistance, most grants and allocation formulas con-
sider only the present population, not the boom and
post-boom populations.
The problem is particularly acute in those communi.
ties where deferred construction and maintenance
must be financed simultaneously with new growth.
Further, the financing for construction workers' hous.
ing and facilities has to begin before the final commit.
ment and approval for the project. I f the project
were to be cancelled or delayed, it would be possible
for the community to be stuck with facilities and no
project, no growth and little ability to pay back the
bonds.

B. GUIDELINES FOR FINANCING

In setting financial objectives and a financing plan,
the following points could serve as useful guidelines
for communities:

Communities should exert a full local effort, to
the best of their ability, to provide for new residents.

The financing plan should be tied to all other aspects
of the adopted plan for growth. Annual budgets
and long-range capital improvement programs
should be regarded as the fuel that energizes the
plan.
States can be helpful in a number of ways. - passing
enabling legislation that permits effective local
effort; in reducing inequities among communities;
in advancing critical front-end money - in grants
or loans - for planning and facilities; and in pro.
viding guarantee powers for local debt, where
appropriate.
The Federal Government can assist in a number of
ways, direct and indirect (See Chapter VI for
specific ideas). It shares mineral leasing and off-
shore oil revenues; in addition, it can emphasize
the impacts of energy projects in its programs.
A sound plan for managing growth, and understand-
ing of the workings of the "financial machinery"
at all levels will increase the likelihood of communi.
ties getting State and Federal money.
Companies will obviously contribute in the form of
taxes which are now standard, but they may have
to do more. Additional taxes may be necessary.
There may need to be corporate guarantee of debt,
prepayment of taxes and purchase of bonds or
notes.
Companies may address themselves to problems which
are not the responsibility of any government program,
for example, the recruitment of doctors. Voluntary
aid is very helpful, but the voluntary approach
alone won't do it.

The greatest financial need of communities with
energy impacts - based on actual experience - is for
sufficient, flexible, quick front-end money for initial
planning, organizing to manage growth, engineering
and land acquisition, and local shares to match State
and Federal grants.

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C. REVENUE SOURCES AND FISCAL DEVICES

A number of revenue sources are available to States
and local governments. State legiSlation generally
defines the sources available to local governments, and
places limits on their use by cities and counties.
Revenue alternatives have been outlined in the Tax
Lead Time Study in Colorado:

General Sales Tax
Selective Sales Tax
Use Tax
Ad Valorem Property Tax
General Occupation Tax
SpeCific Occupation Tax
User Fees

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