OJT says funding for transition should be a shared obligation | CraigDailyPress.com

OJT says funding for transition should be a shared obligation

Funding a just transition for Colorado coal communities will be a shared obligation among public and private actors at the local, state, and national levels, Office of Just Transition says.

The Molly Brown dragline at Trapper Mine moves dirt around on a clear winter day in early January. (Joshua Carney / Craig Press)

The Office of Just Transition’s comprehensive 20-page final action plan looks to help coal workers and their families, and coal communities as a whole, transition away from coal as an economic driver.

The OJT laid out some important suggestions for transitioning communities and workers, but there’s one question that consistently pops up with the action plan: how will this transition be funded, especially with the state of Colorado struggling with a decreased state budget due to the effects of the COVID-19 pandemic?

According to the final action plan, the OJT says that funding a just transition for Colorado coal communities will be a shared obligation among public and private actors at the local, state, and national levels.

“As the Just Transition Advisory Committee clearly recognized, and as we have pointed out throughout this document, figuring out the funding details in a time of significant economic uncertainty and fiscal constraints is among the most challenging parts of our work,” the action plan states.

While the question remains, the OJT says that many of the early actions outlined in the action plan can be achieved within existing resources, or with modest increases in state funding or support from other stakeholders.

“…Getting these early actions right — planning well for the transition at the community and individual levels and laying a solid foundation for future strategies — could greatly reduce the long-term costs of the transition at all levels,” the action plan states.

As finances across the state are in disarray due to the COVID-19 pandemic, the Office of Just Transition says it remains optimistic about potential funding resources for the transition.

“We are encouraged by early indications that there may be meaningful investor interest in supporting business attraction and expansion to diversify local economies in transition communities,” the action plan states. “We also will explore ways to maximize investment and financial support for this plan from existing employers (utilities, power plants and mines), whom we believe have an obligation to assist.”

Knowing that, the OJT’s final action plan has three funding strategies.

Develop realistic options for further state support of just transition strategies

The Office of Just Transition has big plans for helping coal communities transition in the coming years, but there are some big ticket items that the OJT has yet to identify appropriate or adequate sources of funding for some major projects, such as the following:

– Expanding infrastructure in transition communities, the costs of which could be large but can also be scaled based on available resources.

– Helping communities bridge the gap created by lost property tax revenues. The total property taxes paid in 2019 by all coal mines and coal fired power plants was approximately $65 million.

To try and come up with funding to cover some of the costs of the transition, the OJT says it is working with economists at the Colorado Department of Labor & Employment, and issue experts in state government to develop the most dependable estimates of program costs and the actual levels of revenues lost to individual taxing districts in coal transition communities.

The OJT says it is also working with with fiscal experts to identify specific funding options, including repurposing existing revenue streams and tax expenditures, developing other sources of funding, and other fiscal strategies for lawmakers (or voters) to consider should they decide to move forward with any of the more costly strategies discussed in the action plan.

Work with utilities and mining companies to increase transition funding

As previously stated throughout the action plan, the OJT believes that aside from the state having an obligation to help coal communities, utilities and mining companies share some of the obligation for funding community and worker transitions.

Previously, Tri-State — which owns both Craig Station and the Colowyo mine in Moffat County — set what the OJT calls “a hopeful example” by pledging $5 million to community support when it closed its Escalante plant in New Mexico.

The OJT says it will seek to “work directly with and assist power plant and mine owners on strategies for supporting transition workers and communities, either directly or by helping fund some of the strategies in this action plan.”

Ensure the OJT has adequate capacity to continue to develop and implement this Action Plan

“By far, the greatest ne​eds for in​vestment and funding are in transition​ communities and among displaced workers,” the OJT said in the action plan. “The role of OJT and other state agencies is to effectively coordinate and support those transition efforts and to leverage state resources, programs, and authority to benefit local transitions.”

Currently, the Office of Just Transition consists of one person, Director Wade Buchanan. In his budget for the Fiscal Year of 2021-2022, Governor Jared Polis requested a modest increase in funding and staffing for Just Transition, making sure the office can better ensure it can achieve its goals on behalf of the communities and workers.

To do that, the Colorado Department of Labor & Employment will support the Governor’s budget request for OJT through appropriate channels, and will provide any data and other information the General Assembly needs to determine whether to include additional funding for OJT in the state budget.

There is still much to figure out for the OJT’s final action plan from a funding standpoint, but for now the OJT is moving forward in hopes of funding for a “just transition.”

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