Oklahoma House of Representatives
Media Division
December 17, 2003

By MIKE W. RAY
House Media Division Director
OKLAHOMA CITY -- At least one state agency in Oklahoma has felt the brunt of deep budget cuts. In fact, budget constraints prompted state legislators to review the state Department of Mines fee schedule recently.

The agency's spending level was slashed 24 percent this year. The Legislature appropriated $722,124 to the Department of Mines for Fiscal Year 2004 -- the lowest allocation in at least 16 years. The agency's original appropriation for FY 2003, for example, was $949,734, and in FY 1988 the Legislature appropriated $845,700 to the department.

In addition, the agency's staff has steadily declined over last two decades, from a peak of 57.5 full-time-equivalent employees in FY 1985 to 47 FTE in FY 1998, to 36.5 budgeted FTE for the current Fiscal Year 2004.

"Every state I know of is having budget problems," said Suzen Rodesney, chief financial officer for the Department of Mines.

Raising fees to generate more revenue is not a step that should be taken hastily, agency Director Mary Ann Pritchard asserted recently. She noted that coal production in Oklahoma declined to a 33-year low of 1.39 million tons in FY 2002, compared to peak production of 5.73 million tons in FY 1981. Coal mining permits have fallen by 22.5 percent in less than a decade: from 111 in 1996 to 86 in 2002.

Fourteen companies paid $500 each last year for a permit to excavate coal in this state, and the severance tax on the coal they extracted amounted to 7.5 cents per ton. The coal production fee produced $141,000 in FY 2002.

Similarly, permits for mining other minerals in Oklahoma cost $175 each, and the state severance tax is three-quarters of a cent per ton of minerals extracted. That includes crushed stone, gypsum, limestone, granite, sand and gravel, clay and shale, salt and volcanic ash.

Doug Schooley, administrator of the Department of Mines minerals division, told the legislators the production fee paid by minerals operators amounts to less than a nickel per load for a small, "bobtail" dump truck of six to seven tons; 12 cents per tandem, double-axle truck with trailer; 21 cents per load hauled by a semi-trailer truck capable
of transporting 20 to 27 tons of minerals; and only 50 cents per railroad car capable of carrying approximately 50 tons.

Nevertheless, the mineral production fee generated more than half a million dollars each of the last four fiscal years, ledgers show.

A penny of the coal production fee, and one-tenth of a penny of the mineral production fee, are deposited in an account that underwrites the Oklahoma Miner Training Institute.

The institute is based at Eastern Oklahoma State College in Wilburton and provides training in mine safety and health. Courses cover topics such as noise and dust sampling, ventilation, state and federal regulations, first aid, fire prevention and control, blasting, accident prevention and underground rescue. Last year 4,000 coal and mineral miners received training at the institute, records reflect.

Other fees collected by the Department of Mines include permit transfer fees, permit revision fees, and blasting fees. Altogether those levies produced $801,917 for the agency in FY 2002.

All of the department's fees were established by the Legislature, and none has been increased in 17 years, Rodesney said. A comparison of Oklahoma's fees with those charged in other states is virtually impossible to do, because of the variety of formulas employed for establishing mineral mining levies in each state, she said.

The Department of Mines is just one of many state agencies that are being subjected to zero-base budgeting evaluation in an effort to account for every tax dollar the State of Oklahoma spends each year, said Rep. Bill Mitchell. The Lindsay Democrat is chairman of the House Committee on Appropriations and Budget, and vice chairman of the Legislative Oversight Committee on State Budget Performance.

Along with Mitchell, other legislators who attended a recent meeting of the oversight committee were Rep. Jari Askins, D-Duncan; Rep. David Braddock, D-Altus; Rep. Chris Benge, R-Tulsa; Rep. Jack Bonny, D-Burns Flat; Sen. Randy Brogdon, R-Owasso; Rep. Kevin Calvey, R-Del City; Sen. Johnnie Crutchfield, D-Ardmore; and Sen. Mike Johnson,
R-Kingfisher.

-30-  ¶ 11:16 AM