Colorado lawmakers are scrambling to come up with more than $100 million out of the budget to refund taxes the state incorrectly charged to oil and gas companies.
Last month, the state Supreme Court ruled that Colorado has been incorrectly applying a tax credit that allows oil and gas companies to write off the cost of transportation, manufacturing, and processing. The decision leaves the state potentially owing companies more than $100 million.
"We’re just, just reeling from that," said Republican Rep. Bob Rankin, who is on the budget committee.
"This is the most significant financial issue of the session, and it’s in the last three days," Ranking said. "We did not see it coming."
In the short term, lawmakers have decided to pay companies’ claims out of the state’s rainy day fund.
Long term, the tax credit payback is likely to result in big cuts a program that sends severance tax revenue to local governments to mitigate the impacts of drilling.