LOVELOCK - Nevada's rural counties stand to gain under the U.S. Interior Department's proposed budget for the coming fiscal year, but they also stand to lose a growing source of revenue from geothermal royalties on public lands.
The department's $11.5 billion budget request would fund the Payment in Lieu of Taxes (PILT) program to the tune of $398 million, helping Western counties offset the loss from non-taxable federal lands inside their borders.
At the same time, though, it would permanently repeal a 2005 funding formula that gives counties a 25 percent share of the receipts from geothermal royalties, and instead divert that money back into the U.S. Treasury.
Interior Department officials estimate that the change would "save" about $7 million a year. That's about as much money as the federal government spends in the course of a single minute, and it's just a tiny fraction of the estimated $13.9 billion in royalties, rents and fees that the department will collect next year.
Up until now, congressional representatives from Nevada and northern California have successfully fought off efforts to repeal the funding formula. But that hasn't discouraged the Obama administration from pushing forward with an agenda that began under former President George W. Bush.
The annual battles between Congress and the two administrations might seem like a huge fuss over a relatively miniscule amount of money. But when it's divided about 31 ways, that $7 million can do wonders.
Over the years, the royalties have helped otherwise cash-strapped counties offset the potential impacts from geothermal exploration and development inside their borders.
Some counties have used their shares to fund road maintenance and construction projects, while others have purchased conservation easements and water rights.
Despite the windfall to counties, the federal government views the royalty-sharing formula as an undesirable precedent, and as renewable energy development on public lands heats up, it's easy to see why.
Since 2009, the Interior Department has approved 29 renewable energy projects on public lands, and the revenues from future operations could contribute significantly to the U.S. Treasury.
Revenue from conventional energy development is already a secret to the department's success: unlike some agencies, it routinely collects more than it spends.
Next year, it anticipates that it will bring in about $700 million more than it collected in 2011, and over $2 billion more than it's seeking in its budget proposal.
The department's overall request includes $4.6 billion to fund core operations at the U.S. Bureau of Land Management (BLM), U.S. Fish and Wildlife Service and the National Park Service through September 2013. (The federal fiscal year runs from Oct. 1 to Sept. 30.)
Many of the department's proposed expenditures would be revenue-neutral, since it would be shifting income from its money-making operations to its budgetary priorities.
For instance, the department wants to increase conservation funding for private landowners by transferring money from oil and gas development leases, boosting those incentives to a total of $450 million.
Other major expenditures include $818 million for wildland fire management - a 42 percent increase over current levels.
The department also wants $70 million for rural water projects across the country.
In a small but significant proposal, it plans to set aside $2.5 million for conservation easements that could improve access to public lands.
That funding could be a boon to Nevada, in particular.
As it is, access to some of the state's most spectacular backcountry areas in the Ruby and East Humboldt ranges is blocked off by a complicated checkerboard of private and tribal lands. But conservation easements would give hunters, hikers and other recreationists the right to pass through private property on their way to adjacent public lands.
To learn more about the budget proposal, go to: www.doi.gov/.
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