Allard, Salazar fighting move to cut state’s mineral revenues | AspenTimes.com

Allard, Salazar fighting move to cut state’s mineral revenues

Phillip Yates
Glenwood Springs correspondent
Aspen, CO Colorado

GLENWOOD SPRINGS ” Colorado’s two U.S. senators both plan to fight language tucked into a spending bill passed by the Senate Tuesday night that is expected to reduce states’ revenues from federal onshore mineral leasing.

The provision inserted into the $555 billion spending package contains language that would reduce the state’s share from federal mineral leasing ” derived from energy and mineral extraction on federal lands ” by 2 percent. Currently, the split is 50-50; the reduction means states would get 48 percent of the proceeds, and the federal government, 52 percent.

Colorado collected $122.8 million in mineral lease payments in the government’s 2007 fiscal year, according to the Minerals Management Service, the federal agency that collects, audits and disburses revenues from mineral leases on federal and American Indian lands.

Garfield County Commissioner Larry McCown was incredulous that Congress would work to reduce the revenue split in favor of the federal government and against the states.

McCown has previously said mineral lease revenues coming back to the area are too low, especially since the county generated more than $125 million in mineral lease revenues last year. Garfield County received $619,185 in federal mineral lease distributions last year. The spending bill includes $70 billion more for military operations in Iraq and Afghanistan, and funding for 14 Cabinet agencies. It is now headed to President Bush, who is expected to sign it.

“The senator was furious,” said Steve Wymer, a spokesman for U.S. Sen. Wayne Allard, R-Colo., regarding Allard’s reaction to the proposed reduction. “This is horrible for Colorado. The senator is very concerned about this and is looking into doing what he can do to address the situation immediately.”

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Wymer said he and Allard found out about the inserted language at the last moment on Tuesday night.

Stephanie Valencia, a spokeswoman for U.S. Sen. Ken Salazar, D-Colo., said Salazar also opposes the provision. She said the revenue-sharing reduction provision appears to have been inserted by U.S. House of Representative members.

“The senator is going to continue to work and air his concerns about it and work to repeal it,” Valencia said.

Valencia said Salazar, along with Senators Jeff Bingman, D-N.M.; Pete Domenci, R-N.M.; and Mike Enzi, R-Wyo., sent a letter in June to the senators who head the Interior, Environment and Related Agencies subcommittee, opposing the 2 percent reduction. The was included in the 2008 budget that the Bush administration sent to Congress earlier this year.

The senators, in their letter, say Bush’s budget attempted to justify the reduction by saying it was needed to defray “administrative cost incurred in the management of onshore leasing activities.” A similar reduction, which was implemented in 1991 but repealed in 2000, led to “a loss of $250 million from states’ revenues,” according to the letter.

“Withdrawal of this revenue through enactment of this proposal would have substantial unnecessary negative impacts for many Western States,” the letter said.

The letter concluded by expressing the hope that Interior, Environment and Related Agencies subcommittee chair Sen. Dianne Feinstein, D-Calif., and committee ranking member Sen. Larry Craig, R-Idaho, would decline to insert the proposal into an appropriations bill. Nevertheless, it was included in the bill when the Senate considered it Tuesday.

“I can’t imagine why they would have done it,” said McCown, adding that about 50 percent of the revenue the state receives from its share of mineral leases goes to school funding. “The logic doesn’t make any sense. I don’t understand it.”

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