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CWCB and DNR officials outline water funding mix: sports-betting taxes, severance and revolving loan programs
Summary
DNR and CWCB officials briefed lawmakers on Colorado's water funding: sports-betting tax (Prop DD) now funds Water Plan Grants on a three-year cycle, severance tax funds operational priorities and a perpetual base fund that supports revolving water-project loans, and federal funding windows require state readiness for drawdown.
Officials from the Department of Natural Resources and the Colorado Water Conservation Board told the committee that Colorado's water funding ecosystem combines state revenue streams and federal opportunities, and requires coordination to deploy large new federal grants.
Nate Pearson (DNR) summarized available federal funds and noted deadlines in federal appropriations that require Colorado to obligate awards by about 2026. He described Proposition DD sports-betting tax receipts as a new, capped revenue source routed primarily to the Water Plan Grants program; revenue is transferred to CWCB on a three-year cadence and then appropriated by the General Assembly for grant awards.
Cole Bedford (CWCB) reviewed the Water Plan Grants Program, which awards funds to five categories (watershed health, storage and supply, engagement and innovation, land-use and conservation, and agriculture), and noted that the program made 84 awards in the most recent round. He cited examples including the Maybelle diversion improvements on the Yampa River and groundwater conservation-easement work in the San Luis Valley as multi-benefit projects funded by the grants program.
Carly Jacobs (DNR CFO) explained severance tax structure and volatility and how DNR maintains a 200% reserve for operational obligations; excess severance revenue can spill into the CWCB perpetual base fund, which acts as a revolving loan pool. The CWCB water-project loan program provides low-interest loans (minimum $100,000) and has made hundreds of loans totaling more than $1.3 billion since 1971.
Committee members asked how the state will maximize drawdown of federal infrastructure and IRA funds. Officials said prior legislative investments in technical assistance and match funds have helped and recommended continued coordination to capture a share of large federal programs, including the Bureau of Reclamation's upper-basin drought funding.
