Severance Tax

Millie Hamner

Representative Millie Hamner, D-Dillon, was the vice chair of the Joint Budget Committee this past session and will chair the committee in 2016. KVNF's Laura Palmisano recently interviewed Hamner about the past session, the state budget, educating funding, severance taxes and the Taxpayer's Bill of Rights, known as TABOR. 


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  • Severance tax helps fund multi million dollar shooting range near Palisade


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  • Severance taxes help fund large shooting complex on Western Slope
cameo, grand valley
Laura Palmisano / KVNF

The state collects severance taxes from companies that extract nonrenewable resources in Colorado. Some of this money goes to communities in the form of large grants. Most of these grants go to communities to help build fire stations, upgrade water systems, restore historic sites, and aid with other infrastructure or economic development projects. The program is also providing funds for a shooting range on the Western Slope. 

Roger Granat is the 73-year-old mayor of Palisade. He grew up there. And as a boy, he would often visit the neighboring community of Cameo. 

"The general store and the post office sat over here on our right," Granat said on a recent visit to the old town site.  


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  • Lake City Medical Center hosts free health fair 
  • Severance tax supports Western Slope projects
  • The State Legislature finishes its session 
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ouray hot springs pool
Laura Palmisano / KVNF


Severance taxes are a vital source of funding for communities across Colorado. This tax applies to revenue the state collects from mining and energy extraction. Half of these funds go directly to communities affected by those activities. The other half goes towards grants for infrastructure and economic development.  

"We have just under a million gallons of hot, natural spring water that flows into the pool," said Patrick Rondinelli, the city administrator of Ouray, while visiting the city's hot springs pool. 

"There’s always been ponds in the early years that were in this location and then finally in the late 1920’s a formal swimming pool was built on this very site," he said.  "And, it’s been maintained in that condition in some variation. There’s been some changes made to it but basically in this same very site all these years."  

Rondinelli said Ouray closes the pool in the spring for about a week to clean it and do basic repairs. The site attracts about 135,000 visitors a year and is a major tourism draw for the small mountain community.

As a result of Colorado's booming oil production, energy companies are paying more in severance taxes – money they pay the state for taking minerals out of the ground. Half of it is supposed to go to back to local communities, both directly and through grants. But thanks to market forces – and political conditions in Denver – it's not always a stable source of funding.


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