Nevada set to lose $630,000 as Interior cuts mineral money

CHEYENNE, Wyo. — 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.

Nevada will lose about $630,000.

Wyoming Gov. Matt Mead announced this week that his state faces the biggest cut — at least $53 million over 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 and offshore.

The federal money helps Wyoming fund state government operations. Income from energy production allows the state to avoid having a personal or corporate income tax.

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 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.

Pat Etchart, spokesman for the Interior Department’s Office of Natural Resources Revenue in Denver, said the federal budget cuts known as “sequestration” require the department to cut payments to the states.

“Cumulatively, approximately $110 million — or 5 percent of fiscal year 2013 estimated disbursements — will be withheld from several states and counties where energy production occurs on federal lands during the remainder of the current fiscal year,” Etchart said.

Stephens Washington Bureau reporter Peter Urban contributed to this report.