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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 2} Amendment 52 circumvents the statewide transportation planning process by
2 giving decision-making authority for some of the money to the state legislature. The
3 statewide transportation plan, developed by an independent commission, identifies,
4 prioritizes, and selects transportation projects for funding. When legislators prioritize and
5 select transportation projects, political considerations may enter the decision-making
6 process.
7 3}Amendment 52 results in cuts to state programs that are currently funded by the
8 severance tax, such as low-income energy assistance and wildlife conservation. In
9 addition, the measure does not guarantee that any new money will go to projects that
10 relieve congestion on I-70. The money could instead replace current funding for
11 existing projects on I-70. Thus, the measure could result in growth in transportation
12 spending in areas unrelated to relieving I-70 congestion.
13 Estimate of Fiscal Impact
14 State Impacts. Amendment 52 does not change state severance tax collections.
15 Instead, it caps the amount of severance tax revenue that can be allocated to existing
16 state programs and diverts money above the cap to highway projects. Under the cap,
17 funding for existing state programs would grow from $92 million to $102 million over the
18 next four years. Based on the most recent state forecast of severance tax revenue,
19 Amendment 52 shifts $89 million to transportation in the current budget year, and
20 $226 million over the next four years.
21 The money shifted to transportation would have been spent on water projects,
22 existing state programs, and other programs as determined by the legislature. Table 2
23 shows the change in spending that is expected to occur due to Amendment 52. Money
24 for water projects is expected to drop by $44.7 million in 2009, with the actual spending
25 reductions occurring in the following year. In budget year 2009, existing state programs
26 will see a total reduction of $1.4 million. Some of the programs experiencing cuts
27 include wildlife conservation, low-income energy assistance, bark beetle control, zebra
28 mussel control, and soil conservation. In addition, based on the current forecast, the
29 legislature would have been able to spend another $43.2 million in 2009. Over the next
30 four years, spending on existing state programs is expected to fall by about $21 million,
31 revenue for water projects is expected to drop by $113 million, and spending on other
32 programs will drop by $92.6 million.
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