Utah to take $9 million hit and your hometown could take the blow

Published: Thursday, March 28 2013 7:08 p.m. MDT

The Grantsville Public Library will be open to the public on Friday, March 29. The library was built with a low-interest loan paid for by mineral revenues derived from oil, natural gas and coal extraction.

Kristin Murphy, Deseret News

GRANTSVILLE, Tooele County — For the first time in its history, residents in this small town will be able to walk into a stand-alone library building and sit down with works by Mark Twain, Jack London or Margaret Mitchell.

The $2.7 million library, which opens its doors Friday and celebrates with a grand opening on April 13, was built with a low-interest loan paid for by mineral revenues derived from oil, natural gas and coal extraction.

Here's how it works: Mining happens in Utah to benefit the nation. The federal government then returns millions of dollars to the state. But that revenue stream is drying up as federal budget cuts — sequestration — are slashing revenue in 35 states.

Among the top three states hit hardest is Utah, which will lose $1.8 million a month through Sept. 30, or just shy of $9 million, and that's money that goes directly to small communities like Grantsville.

The Department of Interior notified the states of its 5 percent reduction in revenue payments late last week, and state money managers are still grappling with how those cuts will trickle down to rural communities, which receive the money to pay for all sorts of projects that speak to quality of life.

"That mineral lease money has literally been the lifeblood of rural Utah," said former Carbon Commissioner Mike Milovich. "It's going to be a hit and have an impact on all the counties."

Utah had budgeted to get $167 million this year from the Interior Department, with about $58 million due to be funneled to special service districts and another $67 million slated for the Community Impact Fund.

The fund's board sifts through dozens of applications from communities seeking loans or grants to help pay for projects that are often "make or break" because of mineral revenue money, said fund manager Keith Burnett.

In 2012, the list of needs that were met were diverse.

The money paid for a new fire pumper truck in Blanding, San Juan County, expanded a park in Ephraim and fixed some of the streets in Salina. A look at funding going back to 2008 details new ballfields for Kanosh, renovation of the Garfield County Courthouse and money that helped pay for a bike and pedestrian pathway in Wayne County.

"The fact of the matter is if there is something shiny and new in these communities, we probably had a hand in the financing," Burnett said.

The mineral revenue money is distributed by the board in three funding cycles per year, Burnett said, adding that a current slate of applicants is under review, with a final decision due in June.

It is too early to tell, he said, how the federal reduction payments will affect pending requests, but the board will make the necessary adjustments.

"We get a check monthly," and the board never hands out money it doesn't have, he said.

The Interior Department's reductions in mineral revenue payments to Utah will be discussed at the board's next meeting Thursday in Salt Lake City, where members are slated to review the latest round of projects. That includes money for the restoration of a historic meetinghouse in Virgin and improvements to the airport that serves Ephraim and Manti.

The bulk of the mineral revenue money goes to what's called "counties of origin" or where the revenues are generated, so counties in Utah that are big recipients include the oil and gas hubs of Uintah and Duchesne counties and coal-rich Carbon County.

Burnett said the revenue is intended to help rural areas shoulder the infrastructure costs that come with having the extraction industry in their backyard.

"The roads in Uintah County, for example, get hammered. There's people moving in, big-time growth, and you need to be able to support that."

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