Wyoming officials say proposed AML fund cuts dire

CHEYENNE, Wyo.— Top Wyoming officials say congressional action to block about $700 million in federal Abandoned Mine Land payments to the state over the next 10 years threatens to devastate state energy research programs.

Gov. Matt Mead and Sen. Phil Nicholas, R-Laramie, chairman of the Senate Appropriations Committee in the Wyoming Legislature, both say the loss will leave the state hard-pressed to continue to pay for coal research and other programs it has covered with the AML dollars.

The U.S. Senate on Saturday approved a continuing resolution to fund the federal government. It now heads to President Barack Obama.

The resolution would cap Wyoming's AML funding at $15 million a year, down from about $150 million currently. Members of Wyoming's congressional delegation promise to continue to seek restoration of the funds.

Obama has pushed for years to cut AML payments to states such as Wyoming, which receives more from the program than it needs for cleaning up abandoned coal mines.

Congress passed the Surface Mining Control and Reclamation Act in 1977, funding the AML program by imposing a 35-cent tax on each ton of coal produced. Wyoming officials have said coal producers in the state have paid nearly $3 billion into the system with the understanding that the state would receive about $1.9 back.

Mead and Nicholas said Wyoming, as the nation's largest coal-producing state, deserves more than a token amount of the reclamation funds. Both houses of Congress this summer voted to limit all states to $15 million a year of AML funding. Congress later amended the action to raise some other states' AML funding while keeping the cap in place for Wyoming.

"As a strategy, we're a long way from fairness when you cut out the state that's contributing the most to the fund by far," Mead said. "And that is not a way to build a consensus; that is sort of a divide and conquer."

The cut $700-million cut over the next 10 years promises to have a huge effect on Wyoming, Mead said. "We use those funds for a lot of reclamation efforts," he said. "We use them in other areas for science."

The AML funding cut comes at a bad time for Wyoming. Mead in April sent a memo to most state agency directors directing them to prepare for 8-percent cuts in the fiscal year that starts July 2013. Low natural gas prices have cut state revenues while also depressing the price of coal, the state's other financial mainstay.

Nicholas said the loss of the AML funds promises to leave a huge void in Wyoming's budget for future funding of energy research.

"As we look forward, we have a huge void in how we're going to continue funding for those one time projects that were funded with these AML dollars," Nicholas said. "The problem gets more difficult when our revenues are matching our expenses for our ordinary operations. We don't have other parts of the budget to go to to pick up that void."