By Rob Nikolewski │ New Mexico Watchdog
SANTA FE — Attorneys general from a host of Western states — including New Mexico — are protesting a decision by the Obama administration to seize mineral and energy extraction royalties.
Still, it’s far from clear whether their complaints will change anything. The federal government is blaming sequestration. The royalties come from mining and energy extraction.
“We’re very discouraged at (the federal government’s) decision to do this because this is money that really is the states’ money from the beginning,” New Mexico Attorney General Gary King told New Mexico Watchdog on Friday. “It gets collected at the federal level but should be returned to the states.”
For New Mexico, the cut is sizeable: $26 million. Only Wyoming — which is taking a $53.1 million hit — is losing more.
Update 8/12: New Mexico Department of Finance and Administration spokesman Tim Korte says so far almost $21 million of the $26 million has already been seized by the federal government and the remainder is anticipated to be taken through the end of the federal fiscal year – September 30.
King was one of 10 members in the Conference of Western Attorneys General who sent a letter to President Obama last week arguing that the decision in late March to intercept funds is “profoundly flawed” and unfair to states, especially in the West.
“The federal government cannot simply seize money that belongs to the states and their people to cover its budget shortfalls,” the letter said.
In late March, the U.S. Department of the Interior informed states it was cutting payments by 5 percent. The administration justified the decision by saying the royalties are derived from federal land for which U.S. government holds the title.
But the attorneys general dispute that, saying the feds are misinterpreting the Minerals Leasing Act, the 93-year-old law that governs leasing on public lands for development.
“The revenues owed to the mineral-producing states under the MLA are not a gift, a hand-out, or an entitlement but rather are the result of a compromise reached in 1920 that compensation is due to the states for mineral development within their boundaries,” the letter says.
Governors from Western states — including New Mexico Gov. Susana Martinez — also sent a letter earlier this year, but the feds have ignored it.
Will the letter from the attorneys general make a difference?
“If the response is like that of the governors’ (letter) we’ll get together again and look at what avenues we have to pursue to make sure the states get what we believe is due to us,” King said.
Including filing a lawsuit against the Department of the Interior?
“If there are legal theories we believe are valid, yes,” King said.
At the time the cuts were announced, Department of the Interior spokeswoman Jessica Kershaw told New Mexico Watchdog the Budget Control Act of 2011 mandates 5.1 percent spending reductions by the federal government.
“Every department is subjected to that,” Kershaw said. “There’s no real flexibility.”
In April we learned the chief of the U.S. Forest Service wrote a letter to 41 governors across the country demanding states return money already paid them under the Secure Rural Schools Act from year 2012.
Again, the feds blamed sequestration.
For New Mexico, that means a cut of $600,000.
The Conference of Western Attorneys General complained about that decision, too, saying the money “is provided to the states to make up for funds they would have received if the federal government had continued to offer timber for sale on federal lands within the states.”
“The attorneys general as a group aren’t willing to just accept (the administration’s argument) at its face value,” King said.
Click here to read the entire five-page letter from the Conference of Western Attorneys General to President Obama.
Contact Rob Nikolewski at email@example.com and follow him on Twitter @robnikolewski