Interior Department cuts mineral payments to 35 states

The U.S. Department of Interior is cutting federal mineral payments to 35 states by about $110 million this fiscal year as part of the automatic federal spending cuts that started this month. Gov. Matt Mead announced this week that Wyoming faces the biggest cut — at least $53 million during the next five months. Wyoming is the nation's leading coal-producing state and last year received nearly $1 billion in federal mineral payments. The federal government paid a total of $2.1 billion last year to the states, representing their share of revenue from energy and mineral production that occurred on federal land within the states, as well as offshore. New Mexico will take the next-biggest hit, a loss of $26 million. The reduction for New Mexico, a leading natural gas and oil producer, represents about 0.5 percent of the total revenue the state expects to collect in its main budget account in the current budget year. Democratic Sen. John Arthur Smith, chairman of the New Mexico State Senate committee that handles the budget, said he was concerned that the $26 million is the "tip of the iceberg" of potentially larger federal cutbacks to states. "As far as being able to ride the storm out right now in the short-term, obviously we can do that with the reserves that we are forecasting," Smith said. New Mexico should have a financial safety net of about $570 million at the end of this budget year, with those cash reserves roughly equal to 10 percent of the state's spending. Other states hit hardest include Colorado, which is losing $8.4 million, and California, which will get $5.5 million less. The states' losses range all the way down to $7 for North Carolina...more