House rejects oil, gas trust fund
Republicans and Democrats in the House of Representatives joined forces Monday to narrowly reject an effort to take severance tax money from oil and gas revenues and lock it into a reserve account for future use.
Rep. Jim Nielson, R-Bountiful, proposed HB210 as a state-initiated 401(k) proposal that would pay dividends for future generations despite objections from lawmakers that said the budget is currently too tight to be saving that money.
It failed 36-39 in a dramatic vote that required a call for all representatives to return to the floor when the vote stalled at 36-37. Rep. Bill Wright, R-Holden, and Rep. Evan Vickers, R-Cedar City, were the missing votes who ultimately cast the deciding votes.
"I know these times aren't great," Nielson said in an effort to sway colleagues one last time to support the measure. "There's never a good time. But what if this is as good as it gets?"
Nielson's proposal would've diverted about $96 million in taxes from oil, gas and mineral extractions into a fund over the course of five years. That money would then be locked in only accessible by a three-quarters vote in both chambers and signature from the governor to be released into the general fund. But interest from the principal could be accessed as needed to fund areas of the budget.
House Minority Leader David Litvack, D-Salt Lake City, said the economy didn't allow the state the luxury of saving for the future with so many present needs.
He said higher education and roads need that money now, otherwise there will be no later.
"I understand saving. I do it for myself. I do it for my kids," Litvack said. "But I would propose to you I'm not going to make my kids today skip a meal or go hungry so we can save for tomorrow."
Litvack was joined by a wide array of Republicans, including Rep. Ken Ivory, R-West Jordan, who said with the federal government looking to annex lands with oil, gas and minerals on them, severance taxes might end up being unrealized income.
But Rep. Ryan Wilcox, R-Ogden, said states like Wyoming and Nevada have created trust funds from severance tax revenues and used the money to build medical centers and improve roads.
"I'm a little bit embarrassed we didn't start this 30 years ago," he said.
Nielson said he won't try and resuscitate the measure this session and said he believed it failed because lawmakers were skittish about the proposed $13 billion budget and the emphasis on funding education and Medicaid. He also said his proposal wasn't a priority for legislative leaders or Gov. Gary Herbert.