Saving mineral funds is an uphill battle for Wyoming— May 7, 2013
It took bipartisan cooperation from Wyoming’s congressional delegation nearly 35 years ago to help increase this state’s share of royalties from federally-owned minerals located here, and to obtain funds to help pay to clean up abandoned mine lands.
Contrast that with today’s all-Republican delegation, which voted in favor of the Budget Control Act of 2011, setting in motion the drastic, ill-advised “sequester” that prompted a $53 million cut in federal mineral royalties going to the state.
The idea to propose reductions in federal spending so drastic that a grid-locked Congress would have to compromise blew up in the federal lawmakers’ faces when no one gave an inch early this year. Wyoming’s delegation were as staunch as any in welcoming the sequester. The Obama administration was forced to implement the cuts.
Now, Sens. Mike Enzi and John Barrasso are working on legislation with Sen. Tom Udall, a Democrat from New Mexico, to restore the royalty cuts. Udall’s state stands to lose about $25 million, the second highest of the 35 states whose federal mineral money is cut under the sequester.
The big question is how successful can the highly partisan Wyoming delegation be in working across the aisle in an era when the federal government has shown an increasing willingness to take mineral funds away from the states? The times have indeed changed.
As the nation’s top coal producer, Wyoming is used to receiving the lion’s share of federal mineral royalties. But the state saw its Abandoned Mine Land program funds sliced by $700 million last year, and attempts to restore the money seem to be going nowhere. Even if there is eventually some progress on the issue, Eastern coal states that are far more in need of money to cleanup their own mining sites aren’t sympathetic at all to Wyoming’s claim to it.
It’s a far cry from the situation in the mid-1970s, when Wyoming was represented by a split delegation that had to work together to pass mineral legislation that greatly benefited the state.
Former Secretary of State Kathy Karpan had left the staff of Rep. Teno Roncalio — the last member of his party to represent Wyoming in Congress — to go to law school by the time he, fellow Democratic Sen. Gale McGee and GOP Sen. Cliff Hansen successfully worked to increase Western states’ share of federal mineral royalties from 37.5 percent to 50 percent in 1976. That action has resulted in an additional $2.8 billion in revenue for Wyoming over the 35 years since 1976.
But Karpan had a ringside seat when the three lawmakers drafted and then promoted what became the Surface Mining Control and Reclamation Act of 1977 – the legislation that established the Abandoned Mine Lands tax on coal, to help clean up old coal mines nationwide.
Karpan said partisan considerations never entered the talks on the AML tax, which were aimed at cleaning up coal mines from Rock Springs to Appalachia. In Rock Springs, Roncalio’s hometown, subsidence had caused streets to cave in, breaking water lines and doing major damage. After the law was passed, a total of $90 million was spent in AML funds on Rock Springs.
But Wyoming was fortunate, because in addition to creating the AML program, SMCRA set up a regulatory system that called for reclamation to be part of the operational plan for surface mining. When the Powder River Basin’s coal reserves were developed, companies were required to restore the land — unlike the strip mines in Appalachia, which devastated the environment and the economy of the region.
Wyoming received the majority of the AML coal tax money and quickly cleaned up its priority abandoned sites (there’s still much reclamation work to do). It then sought other uses for its AML funds, and has used the money for many projects far removed from its intended purpose. That includes the new $50 million College of Business building at the University of Wyoming in Laramie.
Meanwhile, other coal states argue that they deserve the money that’s automatically allocated to Wyoming. It’s difficult not to see their point.
“I love Wyoming, and I believe in doing something here, but it’s going to be a difficult political sell,” said Karpan, who added that would be true even if the state had an all-Democratic delegation. “States like Pennsylvania, West Virginia, Kentucky, Tennessee and Oklahoma actually have outstanding abandoned mine land sites that are dangerous because you have walls that could collapse on someone, the pollution of their water, and the impacts on fish and animal life. How do you go back and tell them no, you have to give us our money because we still have some buildings at UW that need to be built?”
Karpan, who became director of the Office of Surface Mining during the Clinton administration, said the current gridlock in Washington means it’s likely that SMCRA won’t be changed. But if it is amended, she said, it could backfire on Wyoming, and the state could lose even more AML funds than it already has.
Karpan would like Wyoming to recognize that Roncalio, Hansen and McGee had to fight incredible odds to get SMCRA passed in 1977 after two presidential vetoes, because they were committed to the principle that the government “had to take care of these dangerous environmental conditions that are contrary to what a habitable community should be.”
“When that bill was being worked on, the Rock Springs and the Appalachias of the world are what was in mind with regard to the AML money,” Karpan said, “and we shouldn’t lose sight of that noble purpose. … It was a great victory, and we ought to keep the faith on the promises that we made.”
It remains to be seen, of course, if Enzi and Barrasso will be able to work successfully with Democrats like Udall after they have spent the past four and a half years routinely following the marching orders of the Republican leadership to bash every policy proposed by the Obama administration.
It seems inconceivable that our delegation didn’t at least try to amend the Budget Control Act two years ago to exempt both federal mineral royalties and AML funds from sequestration. I can’t imagine any other delegation from our state not trying to protect these funds, especially the mineral royalties that are so critical to funding our state government. To simply argue now that the feds should have left “our” money alone and cut something else sounds foolish. It was never “our money,” and these were across-the-board cuts that obviously would affect Wyoming in a huge way.
Last week Enzi’s spokesman, Daniel Head, maintained that “the federal government took money that doesn’t belong to it and just used the sequester as an excuse.”
“States are guaranteed a share of the billions of dollars in revenue generated from energy production on federal lands, as they bear most of the costs associated with mineral development,” he told the Associated Press. “The federal government should be cutting its own budget instead of taking money owed to the states.”
“Guaranteed to the states?” What a quaint concept. If that’s the argument Wyoming’s delegation is going to make, we might as well bag up the money and give it back ourselves.
— Veteran Wyoming journalist Kerry Drake is the editor-in-chief of The Casper Citizen, a nonprofit, online community newspaper. It can be viewed at www.caspercitizen.com.
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