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• Board Meeting Date: 9/16/2008
• Description: CF Section - Amendment 52 - Use of Severance Tax Revenue for Highways
• Board Meetings - Doc Type: Memo

3ra Draft
1 How does Amendment 52 change current law? Of the 50 percent of severance
2 taxes spent on state programs, Amendment 52 constitutionally limits the amount that the
3 state legislature can spend to the prior year's amount plus inflation (with an adjustment if
4 severance tax collections decrease). The remaining amount of the state portion must
5 be used to construct and maintain highways, with priority given to relieving congestion
6 on Interstate-70 (I-70). The state legislature is responsible for budgeting the highway
7 money. The state legislature maintains the ability to distribute both the money that is
8 currently returned to local governments and the money spent on state programs, in any
9 way it chooses, just as it does now.
10 Whaf is the projected change in spending under Amendment 52. Table 1
11 shows the projected shift in spending from state programs to highway projects under
12 Amendment 52. For example, in 2009, state programs receive $181 million under
13 current law. Under Amendment 52, these programs receive $92 million, and $89 million
14 is shifted to highway projects aimed at relieving congestion on I-70.
15 Table 1. Projected Change in State Portion of
16 Severance Tax Spending in Millions of Dollars
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2009 2010 2011 2012 Four-Year Total
Projected Total Severance Tax
Revenue $347 $246 $278 $290 $1,160

State Program Money
under Current Law $181 $131 $147 $154 $613
Amount for State Programs
under Amendment 52* $92 $95 $98 $101 $387
Shift from State Programs to
Highway Projects $89 $36 $49 $53 $226
under Amendment 52
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27 * Based on a projected annual inflation rate that varies between 2.2 and 3.5 percent.
28 How are transportation projects currently funded? Fuel taxes, vehicle registration
29 fees, a portion of income and sales taxes, and federal highway money finance
30 transportation projects in Colorado. The state received about $1.2 billion for transportation
31 projects in budget year 2008, with fuel taxes and vehicle registration fees at $415 million,
32 federal funds at $408 million, and income and sales taxes at $426 million.
33 How do Amendment 52 and Amendment (#113) interact? Both Amendment
34 52 and Amendment (#113) change how the state spends severance tax revenue, but
35 the two measures propose different uses for the money. Thus, some of the provisions of
36 these measures appear to conflict with one another. This measure proposes a change
37 to the state constitution, and Amendment (#113) proposes a change to state statute.
38 When conflicts arise between the constitution and statutes, the constitution prevails.
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