Federal Tax Suspension Promotes Trona Mineral Operation While Depleting School Funds

Action by the federal government aimed at promoting domestic mineral development taken during the final stage of the Donald Trump Administration and left in place during the opening months of the Joseph Biden Administration already is having a positive impact on the largest company at the furthest northwestern extension of San Bernardino County.
While the new federal policy carries with it the potential to rejuvenate the long-sputtering economy in Trona, an unincorporated community of roughly 1,950 population just south of the gateway to Inyo County and Death Valley and east of the border with Kern County, it has simultaneously deprived the educational system there of a crucial means of support.
In an ironic twist, First District Supervisor Paul Cook, who was an architect of the federal policy while he was yet a member of Congress two years ago, is now faced with the seemingly intractable problem of redressing the funding imbalance in the Trona Joint Unified School District, which lies within one of the larger unincorporated areas of the jurisdiction Cook now represents as a county official.
Beginning in 2019, Congress began discussions of how to even the playing field soda ash producers had to play on within the context of global markets for their product, given the way in which China heavily subsidizes its soda ash industry and Turkey, another leading exporter of the product, has worked to keep its soda mining enterprises competitive.
The United States is the world’s largest producer of natural soda ash, while China is the world’s largest producer of synthetic soda ash. Over 80 percent of the soda ash production in the United States takes place in Wyoming. Trona, however, which is home to the Searles Valley Mining Company, is a major soda ash source, as well.
As a raw material, soda ash is vital to the production of certain types of detergents and cleaning agents, as well as various chemical fertilizers and dyes. It is also used in the processing of pulp for the paper industry. Types of adhesives and sealants are also manufactured utilizing soda ash. Several chemicals, such as sodium silicate, sodium bicarbonate and percarbonate, sodium chromate and dichromate, are produced using soda ash. It has metallurgical applications as well, including the recycling of aluminum and zinc.
Paul Cook, who was then a U.S. Congressman representing California’s 8th congressional District, which includes Trona, worked with Wyoming Congresswoman Liz Cheney toward rejuvenating the American soda ash mining industry beginning in 2019 and into 2020.
Ultimately, in conjunction with the Bureau of Land Management, a strategy of reducing the 6 percent royalty soda ash producers pay to the federal government to 2 percent was arrived at. A royalty is a lease payment for mining on federal land, based on a percentage of the gross earnings from that mining activity. After he achieved that goal, Cook departed from Congress in December 2020 to take on the position of supervisor he had won in the March 2020 election.
That royalty reduction is to remain in place for ten years, and became effective January 1, 2021 for all existing and future federal soda ash and sodium bicarbonate leases. Implementation of the royalty rate reduction was intended to counter the expanded global market influences of Chinese and Turkish production, encourage expanded investment and job creation by U.S industry, promote U.S. mineral development, and enhance national security. By putting the reduction into place for a decade, federal officials believe companies involved in soda ash mining will have greater economic certainty to make immediate, long-term investments to strengthen the industry.
On July 4, 2019, Trona was hit by a 6.4 Richter Scale earthquake, followed by a 7.1 Richter scale earthquake the following day. Homes, buildings, roads and other infrastructure were damaged by the seismic disturbance. Of note was that the schools in the Trona Joint Unified School District sustained substantial damage. While Trona High School was initially used as a place where residents whose homes were rendered uninhabitable by the quake congregated and were provided with assistance, it was later determined that the high school’s buildings were unstable. High school students returned to classrooms they had been in when they were in the fifth and sixth grade at the district’s elementary school to receive instruction.
With the onset of the coronavirus pandemic, the district bought students laptops so instruction could continue on-line. Last year, the district, led by newly-hired Superintendent Jairo Arellano, began casting about for ways it would be able to repair or replace the district’s schools when the COVID-19 crisis ends.
The district functioned on an annual budget of roughly $5.58 million previously, some $4.11 million of which came from the soda ash royalty paid by Searles Valley Minerals. With the reduction of the soda ash royalty the company is paying, the district is now receiving around $1.37 million annually in funding put up by Searles Valley Minerals through the federal government, a reduction of $2.74 million. The district, now functioning on a budget of around $2.75 million, is struggling to educate its 260 students. It has no money left to contribute toward the estimated $55 million repair costs for district schools. While some state and federal money for that purpose might be coming in the future, it is not available yet.
In November 2020, just prior to his leaving Congress, Cook co-sponsored the Soda Ash Funding for Education (SAFE) Act, H.R. 8728, which called for “redirecting federal funds to establish a Soda Ash Education Equalization Fund to provide grants to local schools that could be impacted by” the soda ash royalty reductions. Cook said he hoped the legislation, which was not passed by the time he left Congress, would “prevent unnecessary education funding cuts in communities like Trona.” He said he did not want to saddle the Trona Joint Unified School District with a funding challenge it had no hope of overcoming.
H.R. 8728 has been routed to the Committee on Natural Resources and the Committee on Education and Labor. No infusion of funding to the district has arrived.
The dire situation in Trona, created in part by the gap in funding that comes with the reduction of the soda ash royalty collected by the Bureau of Land Management, now stands as an issue the County of San Bernardino and Cook have no easy means of solving.
-Mark Gutglueck

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