By Rob Nikolewski | New Mexico Watchdog
The federal government has sent letters to 35 states, informing them it’s cutting federal mineral payments by about $110 million, or 5 percent, as part of the automatic spending cuts that started this month due to sequestration.
The feds paid a total of $2.1 billion last year to states, revenue from energy and mineral production that occurred on federal land within those states.
Late Wednesday, New Mexico finance officials were still reluctant to talk to New Mexico Watchdog, saying they had just heard of the federal government’s decision.
But Wyoming’s governor says he thinks the decision is unfair and plans to fight the Obama administration, which made the announcement through the Department of the Interior.
Gov. Matt Mead said it’s “not acceptable” that the edict was made on short notice and has asked the Wyoming Attorney General for advice on what he can do to block the Interior Department’s action and has contacted Wyoming’s congressional delegation.
In the meantime, the chairman of the Roundhouse’s Legislative Finance Committee told Associated Press that while the $26 million hit represents less than 1 percent of the state budget, the news certainly isn’t welcome.
“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,” Sen. John Arthur Smith said, adding that the cut could end up becoming the “tip of the iceberg” of larger federal cutbacks to states .
The AP reports 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.
Contact Rob Nikolewski at email@example.com