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Senator Gruenhagen highlights severance tax proposal, questions allocation to taxpayer relief fund
Summary
Senator Gruenhagen summarized committee action on a separate bill (Senate File 2490) that would give DNR authority over oil, gas and hydrogen production and impose a 6% severance tax with a majority directed to the taxpayer relief fund; he questioned whether those revenues should be available for the general fund instead.
In closing remarks on House File 2772, Senator Gruenhagen summarized a recent committee vote on Senate File 2490 and raised questions about how severance tax revenues would be allocated.
He told the chamber that Senate File 2490 ‘‘includes a severance tax on the extraction of oil or gas from lands within the state at 6% of the fair market value, and it appropriates the proceeds of future severance tax revenues to various purposes, including 70.1% to the taxpayer relief fund.’’ He said putting revenues into the taxpayer relief fund limits the Legislature’s ability to spend growth in the general fund and framed the allocation as part of a larger debate over spending priorities.
Senator Gruenhagen used his remarks to contrast Republican priorities of spending restraint with critics who asked why revenues could not be placed in the general fund to expand spending.
No committee action on Senate File 2490 is reported beyond the committee passage noted on the floor; the measure’s allocation formula and the budgetary consequences were raised as points of contention during floor debate.
