Western States Won't Lose Out on Millions in Energy Payments

Stateline Dec15

An oil derrick in Montana, which was poised to lose $23 million in energy royalty payments due to expense of the tax bill.

© Matthew Brown, The Associated Press

Western states no longer have to worry about losing millions in energy royalties due to the high cost of the new tax package.

The $1.5 trillion price tag of the law triggers automatic spending cuts on a number of government programs. That includes cutting off millions in royalty payments to states that have oil, coal and gas development on the federal lands within their borders.

But shortly before leaving for the holidays, Congress voted to suspend those cuts, ensuring the payments would reach states.

Many cash-strapped Western states have already had their budgets hit hard by declining energy prices. Leaders in several states said they were already struggling to balance budgets, and areas like education and health programs are particularly reliant on royalty payments for funding.

States like Montana, New Mexico and Wyoming would have been the most vulnerable to the cuts, losing payments ranging from $23 million to $664 million.

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