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JBC staff outline severance tax rebalancing package, seek committee guidance

2706254 · March 17, 2025
AI-Generated Content: All content on this page was generated by AI to highlight key points from the meeting. For complete details and context, we recommend watching the full video. so we can fix them.

Summary

JBC staff presented a roughly $90 million severance tax proposal to cover programs reliant on severance receipts while preserving reserves, and asked the Joint Budget Committee to review allocations for DNR, water projects, energy impact and decarbonization tax-credit administration.

For the record, Mark Ferrendino, SPV director, told the Joint Budget Committee on Monday that staff are recommending a package of severance-tax related transfers and general fund backstops to maintain core programs while preserving reserves.

Ferrendino said the office's forecast showed "significantly less severance tax than what we had forecasted just 3 months ago," and that the shortfall affects programs that rely on severance receipts. "We have a proposal of what to do," he told the committee, summarizing line-by-line adjustments staff will ask the committee to consider.

The nut graf: Staff framed the request as an attempt to strike a balance between using reserves to keep Department of Natural Resources (DNR) and other programs operating this year and avoiding a long-term erosion of the severance tax operational reserve.

Staff proposals described by…

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