There are plenty of reasons to dislike the budget deal that came out of Washington this week. For starters, it actually increases the deficit in the short and medium term in exchange for faint promises of cuts that are almost certainly never going to materialize. For another, it raises taxes on everyone who plunks their tush in an airplane.
That’s some kind of awesome bipartisan deal. Thanks a lot, Washington.
Another little-noticed feature that makes this budget agreement a rotten apple – it siphons away federal mineral lease revenues designed to help local communities dealing with expanded oil and gas production pay for infrastructure (e.g., roads).
Here’s how it works. The federal government takes a 12.5 percent royalty from energy companies on oil and gas production on federal land. In 2008, Interior Department began taking a two percent administrative fee of the royalties. Prior to that, the split between the states had been 50-50. The budget deal permanently implements a 51-49 percent split that favors the feds. This two percent federal grab would have expired in January if not for this budget deal. As we reported in August, Colorado received nearly $158 million in disbursements from the program last year.
Nice budget gimmick – robbing Peter to pay Paul. Funny thing about liberals – they hate fracking, but they love spending those fracking bucks. Another funny thing about liberals – they won’t cut entitlements, but they sure are eager to cut funding to rural communities.
But for “Me Too” Mark (Sen. Mark Udall), who, like the sheep that he always is, voted for the budget deal, it is actually worse than that. According to the Associated Press:
“The budget deal in Congress will cost Wyoming, New Mexico and other states $415 million in lost oil and gas royalties over the next decade, according to the Congressional Budget Office.”
Dating back to the Bush Adminsitration, Udall has tried to position himself as the guy who protects lease payments to rural communities. Even earlier this year he was on board, according to a Northern Colorado Business Report article:
“Seeking to keep millions of dollars in mineral royalties here at home, Colorado Senators Michael Bennet and Mark Udall said they will introduce a bill ensuring that royalty payments made under the Mineral Leasing Act of 1920 will be released to Colorado and other Western states immediately and will not be withheld in the future under the automatic federal budget cuts known as ‘sequestration.'”
There are countless other examples of Udall screaming about protecting these local payments. But that’s Udall, talk a good game at home, vote like a big government sheep in Washington.