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What Proposition 112 would mean for Colorado schools

Author: Erica Meltzer, Chalkbeat Colorado - November 6, 2018 - Updated: November 6, 2018

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Therese Gilbert wears an Amendment 73 button to show support for more school funding, but she’s knocking on doors seeking votes for Proposition 112.

A Greeley middle school teacher, Gilbert has spent years trying to keep oil and gas activity away from schools in her district. She collected some 900 signatures to get Proposition 112 — which would prohibit any oil and gas development within a half-mile of homes, schools, playgrounds, sports fields, parks, streams, and other “vulnerable areas” — on the ballot.

The 2,500-foot setback requirement is among the most contentious measures on a lengthy Colorado ballot this year, and perhaps nowhere more so than Weld County, home to nearly half the state’s 55,000 producing wells. The oil-and-gas boom has brought an influx of new residents and good-paying jobs along with concerns about health and safety. Those competing priorities have divided communities.

“I have former students telling me, ‘Miss Gilbert, I’m making $100,000 a year,’ and how can I not be happy for them?” she said. “You can see how complicated this is.”

The debate over Proposition 112 has particular resonance for school communities. The fight for larger setbacks has gained momentum as parents and teachers felt powerless to keep heavy industrial activities away from places children learn and play. But opponents say the measure amounts to a near ban on drilling, with dire consequences for the state’s economy — and therefore, school budgets. An analysis by one business-affiliated group estimated $7 billion in lost tax revenue by 2030. Particularly at-risk is a state grant program for school construction that’s been a lifesaver for poorer districts.

Oil-and-gas interests have raised more than $30 million to fight Proposition 112. In a year when teacher protests drew attention to school funding and a statewide tax increase for education is on the ballot, opponents of the setbacks measure are putting that money into a campaign that highlights the potential harm to schools. In one television ad, a bearded teacher fades from the classroom. “Colorado Teachers Would be Hurt by Prop 112,” reads a mailer.

Neil Ray, president of the Colorado Alliance of Mineral and Royalty Owners, lists the multitude of ways oil-and-gas money goes to schools: Severance taxes flow into state and local coffers, some districts get royalty payments on their own mineral rights, mineral leases feed the state land trust, and oil-and-gas production contributes to the property tax base of many districts.

“In the short term, it’s several hundred million dollars,” he said. “As production winds down, those taxes that are collected and sent to schools will go to zero.”

School officials have taken notice. The Rural Schools Alliance, which represents 147 Colorado districts, came out against it, while the boards of many of the suburban districts that have advocated for larger setbacks have remained silent.

The board of Greeley-Evans District 6 recently voted 5-2 to oppose Prop 112. Board President Roger DeWitt said every other local institution had spoken out against the measure — Weld County, the city of Greeley, the University of Northern Colorado, Aims Community College — except the school board.

Gilbert, the teacher opposed to fracking, has seen the board go from leasing district-owned land for drilling with little discussion to adopting a resolution supporting 2,000-foot setbacks from schools. On 112, Gilbert said board members failed to find their “moral spine.”

DeWitt estimates that property taxes from oil and gas operations contribute about $20 million a year toward the district’s $240 million annual budget — almost as much as the $14 million a year tax increase voters approved in 2017 after repeated failed attempts.

He acknowledges the measure presents complicated decisions for those invested in schools.

“The bitter taste for us in saying that 112 needs to die is that up until now, we’ve had no voice in the placement of these operations,” DeWitt said. “We do see ourselves exposing some of our more vulnerable citizens to these chemicals that have the potential for harm, but with 112, we have the prospect of economic chaos.”

And that’s the crux of the issue.

Is fracking safe enough to occur near schools?

That depends how you define near and safe. A gas leak forced the evacuation of a football game in Greeley last year. The operator of a facility near an Erie elementary school was cited by state regulators after they observed volatile organic compounds “visibly drifting toward the children.”

Some people who live near wells report a host of symptoms, but the Colorado Department of Public Health and Environment did not find significant health risks. This year, the Colorado School of Public Health released a study that found elevated cancer risk for people who live within 500 feet of wells.

Until 2013, the required setback from occupied structures was just 350 feet. Now it’s 500 feet, and any operation that would locate within 1,000 feet of a school requires a hearing, not just administrative approval. But that 1,000 feet is measured from the schoolhouse door.

At Bella Romero Academy in Greeley, a new well sits 1,350 feet from the school, where the large majority of students come from low-income and immigrant families. But the well is closer than that to the playground and the soccer field. At one point, the operator discussed giving the district land to move the playground, but “that never came to fruition, if that’s a polite way of saying that,” DeWitt said. The school district is working closely with the fire department to prepare for the possibility of an accident. 

PHOTO: Kyle Ferrar/FracTracker Alliance
Students at Bella Romero Academy in Greeley play within sight of a gas well. Right now, it’s not operational during the school year.

While the science around the health risks of fracking is contested and evolving, the fact that gas sometimes explodes is not. The Denver Post documented at least eight fires or explosions at oil-and-gas facilities in an eight-month period, two of which killed workers. In April 2017, two men died in a home in Firestone after gas leaking from an improperly closed flowline near their home exploded. Just before Christmas, an explosion at the Stromberger pad in Windsor seriously injured a worker, rattled an entire community, and required a massive emergency response to contain. “We used pretty much all the foam in northern Colorado,” one fire chief told High Country News.

Bills that would have required wells to be at least 1,000 feet from any school property were killed in the Republican-controlled Senate. The commission now has a rule-making process underway on this same question, with hearings set for December. Ray said the industry recognizes the concerns, but these regulations need to protect mineral rights and economic activity.

“It’s too emotional to say you should have no drilling close to where people are. It’s a matter of reasonable risk,” Ray said.

Supporters of Prop 112 see “reasonable risk” differently.

“The research is not conclusive, but the correlation is certainly outlining risk, and apparently they are comfortable taking this risk with other people’s children,” Gilbert said. “We should not be risking our children’s health.”

And what, exactly, will the financial impact on schools be?

The answer to this question is entwined with the overall economic impact of the measure. Proposition 112 wouldn’t affect current drilling activity, but it would affect the future ability to develop those resources.

The Colorado Oil and Gas Conservation Commission estimated that Proposition 112 would put 85 percent of non-federal land in Colorado off-limits to drilling. An economist at the Colorado School of Mines suggested the effect would be less severe, but his colleagues in petroleum engineering strongly disputed his claims. Federal lands, most of them in western Colorado, would not be affected by the measure.

Over time, the state and school districts would take in less money from severance taxes, property taxes, and ad valorem taxes on oil and gas production. The specific impact would vary across communities.

Read more about Proposition 112

  • Your questions about Proposition 112 and oil and gas, answered Colorado Public Radio
  • Analyzing seven big questions about Colorado’s ballot fight over oil-and-gas setback Colorado Independent
  • Proposition 112: Dissecting the science behind the oil and gas setbacks initiative Denver Post

Chris Selle, superintendent of the 700-student Meeker district in northwestern Colorado, said roughly 86 percent of the assessed property valuation in his district is industrial, the large majority of it used for oil and gas extraction. At the same time, Selle said, the wells in Meeker are miles outside of town and not near school buildings. It’s a different calculus.

Prop 112 is also likely to exacerbate a thorny problem in school finance. After determining how much money each district should get per student, the state makes up what can’t be provided by local tax revenue — and this state share has gone up dramatically over time. If local districts are hit by loss of oil and gas revenue, the state would have to make up that money at the same time that it has less to go around.

The state’s fiscal analysis declined to put an exact number on the lost revenue. Annual severance taxes paid to the state have ranged anywhere from $4 million to $264.7 million between 2012 and 2016 due to fluctuations in gas prices and drilling activity. While proponents of 112 acknowledge there will be an economic impact, that volatility is one reason they aren’t as concerned.

“You cannot rely on a boom and bust industry to fund your schools,” Gilbert said.

The Building Excellent Schools Today or BEST grant program is also likely to take a hit if the measure passes. This program provides money for school construction and repairs, especially in communities without the tax base to support a large bond request. It is funded through a combination of state trust land money, much of it from oil and gas leases, marijuana taxes, and lottery proceeds.

Meeker hasn’t been successful in securing a grant yet, but Selle would very much like to. The district is asking voters to approve a bond request for a new high school, and additional money would allow for a better building.

The State Land Board, which administers public land for the benefit of Colorado schools, estimated that if the larger setbacks had been in place between 2015 and 2018, it would have earned 60 percent less. The board predicts a $230 million loss over the next three years if Proposition 112 passes.

DeWitt, of Greeley-Evans District 6, said 112 is “not the solution we’ve been seeking,” but he hopes something changes.

“I don’t think this will wake anyone up on the regulatory side, but it would behoove the operators to say, ‘we dodged a bullet here,’” he said. “We need to fix this.”

 

Chalkbeat is a nonprofit news site covering educational change in public schools.

Erica Meltzer, Chalkbeat Colorado