Local Government Severance Tax Fund Transfer

The Governor is proposed, and the JBC agrees, to transfer $10 million from the Local Government Severance Tax Fund into the General Fund to help balance the budget.

Money from that fund goes to local governments to offset the costs of energy development, like oil and gas production.  The Dept. of Local Affairs distributes the money two ways:

• direct distributions according to a formula
• grants

The transfer won't change the amount available for Direct Distributions to local governments, but it will reduce the amount available for grants.  Even with the transfer, there will still be $32 million for grants in FY 2010-11.

The transfer requires a change in law; it's in (TBD).