Putting Your Money Where Your Mouth Is: The President’s FY ’16 Budget

Monday, the President delivered to Congress his FY 2016 budget. In the Federal Government, Congress controls the purse strings of our budget process. However, through his budget President Obama does get a crack at making the case for what is important to him. And there is no better way to know any politician’s priorities than following where our money goes and who pays for it to get there.

Creating a Level Playing Field

In the President’s Department of Interior budget, Obama asks for two modest reforms that would create some fairness for American taxpayers as well as simplicity and certainty for extractive industries. These reforms follow a recurring theme the President presented in earlier budgets designed to treat the hardrock mining industry more like coal, oil, and gas extraction.

First, right now, the American people receive no royalty for the gold, silver, and copper mined from our public lands. We estimate that taxpayers have given away more than $300 billion in taxpayer owned minerals in this fashion. So, the President suggests a change in the law that would create a leasing and royalty program under the Minerals Leasing Act of 1920 for new mining claims. For a 5% gross royalty, the Treasury Department expects to raise $80 million over the next decade.

Polluters Pay not Taxpayers

Second, the President wants the hardrock mining industry to pay for toxic legacy left behind by hundreds of thousands of abandoned mines. Coal miners already pay a reclamation fee of 28 cents per ton of surfaced mined coal in to a fund to clean up Abandoned Mine Lands (AML). The FY ’16 budget asks to increase this fee to 35 cents, returning to the levels the coal industry paid back in 2006. While a small portion of this money is also used for hardrock mines, the magnitude of the clean up problem requires a specially dedicated independent funding stream. The 2016 budget creates this fee on toxic hardrock mine waste that promises to raise $180 million per year.

Getting Our Money’s Worth

Overall, the President’s FY ’16 budget reflects the need for serious investments in renewables and a commitment to fighting climate change. It ends the nonsense of sequestration that has hamstrung DOI from its critical roles in processing permits and enforcing the rules. As Congress considers their own budget and tax priorities, we hope they will agree with the President to put American taxpayers over polluting industry profits.