We challenge the idea that the federal government is “giving back” when it releases $40 million in mineral royalties it is legally obligated to share with Wyoming.
Isn’t it the same as taking someone’s wallet and then handing back a few dollars at your convenience?
The Mineral Lease Act outlines the money owed to states when minerals are extracted from federal land inside their borders. But — enter the sequestration law of January, and presto — the feds decided they could reduce Wyoming’s payments by millions each month.
Through some accounting gimmicks and under the guise of sequestration, the federal government was able to keep the cash sent to it from companies doing business in Wyoming rather than paying the legally set share to the state.
It’s hard to imagine that the feds themselves would applaud if you decided you weren’t going to pay your income tax until it was convenient.
Do you know of any thank-you notes sent by the IRS to people who decide to pay their taxes eight months late?
Neither do we.
After months of vigorous protest from Wyoming’s congressional delegation, governor and attorney general, along with the officials from other affected states, the Department of Interior announced in late August that it would release some of the money withheld from states.
As reported by Star-Tribune writer Kyle Roerink, the Department of Interior reacted to being hit on the head by a ton of bricks in the form of complaints from the Western Governors Association, congressional delegations, attorneys general and state treasurers.
His reporting recalled how a similar appeal in 1988 over withheld funds produced a federal appeals court statement that it could be considered a “sham” by critics to freeze payments owed to states. So the Department of Interior realized that it could, should and would release some of the money it’s been holding onto.
But it’s not really time to throw a party.
As Roerink reported, language in the Budget Control Act means that states “will have to wait until the end of each fiscal year for the next 10 years to receive the money.”
Not to sound bitter, but will there be interest payments along with that withheld money when it finally comes our way?
The problem is that the money that’s sent to states was money they were owed under federal law governing how extraction of non-replaceable resources on land inside a state should be handled. The federal government should have merely been playing the role of an accountant, collecting royalty fees and then sharing them with the states according to legal formula.
To give an idea of how important this issue is to Wyoming, consider what a big deal it has been to the state that its share of the mineral royalties was increased from
37.5 percent to 50 percent in 1976.
When Gov. Dave Freudenthal was eulogizing former U.S. Sen. Cliff Hanson, R-Wyo., in 2009, he credited Hanson’s efforts to increase the states’ share to 50 percent with bringing $2.8 billion to Wyoming during the course of 33 years.
So when the federal government decides to dam up the legally set flow of water to Wyoming, it shouldn’t expect gratitude when it changes course and releases a few gallons.
Thanks, feds, but you still owe us.