By Matthew Anderson
Published on December 7, 2017

Originally published by The James Madison Institute.

Self-determination, individualism, and self-reliance — these American values have shaped the settlement and prosperity of our country.  From the days of our nation’s founding until today, these values remain an integral part of our culture and way of life.

This is especially true in the West.  Ranchers, farmers, loggers and a host of others who eke out a living on public lands try to live these principles day in and day out. Unfortunately, heavy-handed and one-size-fits-all policies imposed from D.C bureaucrats – far removed from the land and people who know it best – are eroding these values. Increasingly, federal dependence is becoming the name of the game in the West and Eastern states are footing the bill.

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Nearly 90 percent of all federal land is located in the Western United States, with roughly one out of every two acres of the entire West being controlled by the federal government, increasingly influenced by environmental interest groups. The percentage of federal land in the 13 contiguous western states ranges from around 30 percent in Montana to about 80 percent in Nevada.[i] For decades, westerners have seen how this disproportionate amount of federal land has deprived them and their respective states of economic opportunities. The problem is only growing worse as environmental interests and centralized government work to lock up the land and its life sustaining resources. Without access to federally-controlled lands, states in the West must increasingly rely on those in the East to fund land management and government services.

With so much federal land, local governments in the West have significantly less land available to tax than their eastern counterparts. To offset the loss of these property taxes due to non-taxable federal lands and compensate local governments, the federal government has established the payment in lieu of taxes (PILT) program. These payments are intended to help local governments carry out vital services like police protection, the construction of roads and bridges, firefighting, search and rescue operations and public education. Although all 50 states are eligible to receive PILT payments, the 13 western states receive approximately 83 percent of the total disbursements.

Despite millions of dollars in federal compensation, PILT payments do not justly compensate local governments in the West.  In a joint study done by the Bureau of Land Management (BLM) and U.S. Forest Service (USFS), it was calculated that PILT payments generate about $1.31 less per acre than that which property taxes on those lands would produce if taxed at the same rate as other lands of similar value.[ii]  In 2010, roughly $300 million was distributed to the 13 western states.  However, this $300 million only accounted for a small portion of the $4.2 billion western states would have received in property tax revenue that year.[iii] These payments will need to increase in coming years to account for expected population increases in the West, even if they don’t justly compensate western communities.

Two federal agencies, the BLM and USFS, control nearly 90 percent of all federal lands in the West. These 300 million acres of federal multiple-use lands have enormous potential to generate revenues for the public good, yet the BLM and USFS lose taxpayers nearly $2 billion a year.[iv]

On the other hand, western states are controlling costs and generating substantial revenues from their trust lands. Like the BLM and USFS, state agencies lease their trust lands (40 million acres) for timber, grazing, and mineral development, as well as for recreation. These states actually earn a profit, unlike federal agencies.

From 2009 to 2013, the states of Montana, Idaho, New Mexico, and Arizona earned a combined average of $14.31 for every dollar spent managing state trust lands. During that same period, the BLM and USFS lost 27 cents for every dollar they spent overseeing federal lands.[v] Not only do federal land agencies earn far less than state agencies, they outspend states by a wide margin on a per-acre basis. Federal land expenditures are more than six times higher per acre than state expenditures.

The financial woes of federal land management agencies aren’t confined to the BLM and USFS. The National Park Service (NPS) has almost a $12 billion backlog in deferred maintenance projects – an amount five times higher than the agency’s latest budget from Congress.[vi] The deferred maintenance backlog refers to the total cost of all the maintenance projects that were not completed on schedule and have therefore been put off or delayed. The effects of these delays are rampant throughout western national parks and have major implications for their infrastructure and recreational opportunities. Take trails for example. 6,700 miles of trails – more than one-third of all trails in the entire park system – are in “poor” or “seriously deficient” condition.[vii] In some cases, the backlog threatens the very resources the NPS was created to protect. The NPS’s inability to fix a leaky wastewater system in Yosemite National Park caused raw sewage to spill into the park’s streams.

In the west, excessive federal ownership and control of land prevents state and private interests from best-use and management of property. As a result, trillions of dollars of potential revenue that could go towards strengthening economies, funding land management, and meeting needs of citizens is left untapped.

In Florida, policymakers should be vigilant to avoid the plight of states west of the Mississippi.  While federal ownership is not as acutely felt in Florida as in the West (although Florida helps pay for subsidies to the west), state government ownership and control is growing and potentially could have a significant impact.

According to a February 2017 summary published by the Florida Natural Areas Inventory, Florida contains 34.65 million non-submerged acres.[viii]  Of that total, approximately  10.5 million acres (30 percent) are held in conservation.  Of those lands, state government owns and manages 14.1 percent; the federal government owns and manages 11.6 percent; and, local governments account for 1.4 percent. This does not begin to consider the acreage used for state and local government office buildings, agency operations, or maintenance, etc.  It also does not include acreage used to house state educational facilities.  Regardless, these statistics reveal that a lot of Florida is already in government ownership and control.

While governments always seem to expand, the most aggressive government acquisition of property has come in the area of conservation.  The Florida Legislature passed many laws to enhance conservation in the 80’s and 90’s.  But, it has been during the years between 1999 to 2015 where the acquisition of conservation land has intensified.  During this period, there have been two programs passed by the Florida Legislature that have increased the amount of state-owned conservation lands by 30 percent.[ix]

Preservation 2000 was a program that allowed for the purchase of land for conservation from 1999 to 2005.  Since 2001, the Florida Forever program has allowed for the purchase of land and continues in effect today. Together, these two programs have put approximately 2.5 million  acres  into state government ownership at a direct cost of $6.2 million to Florida’s taxpayers. This direct cost does not account for the indirect revenues lost from the property being removed from the tax rolls.

During the years of America’s great recession, land purchases by the state were greatly diminished due to decreased state revenues.  The legislature was forced to cobble together a state annual budget that focused on the immediate needs of people.  However, as the economy has stabilized and rising revenue projections have returned, calls for land purchases and easements are increasing in volume.

In 2014, Florida voters passed Amendment 1, the Florida Water and Land Conservation Amendment.  The amendment called for designating one-third of real estate documentary stamp revenues towards conservation land acquisition, maintenance of government owned property, renovation of historical sites, and restoration of the environment(especially the Everglades), etc.  To some, this seemed like an opportunity to balance the aggressive acquisition of land with funding, thus enabling the state to be better stewards of its land and water.  But, to others, it was seen and promoted as an open checkbook for carte-blanche land purchases.

Easily overlooked by those advocating for more land purchases is the cost of property maintenance. Maintenance is critical to clearing brush for preventing wildfires, fighting off invasive species and plants, and protecting the overall land aesthetic.  Unlike property purchases which are one-time expenses, property maintenance is an ongoing, recurring expense.  It must be paid every year. Property maintenance requires employees (salaries, insurance and pensions), facilities, equipment, fuel, and other expenses.

The 2016 Annual Report of the Land Management Uniform Accounting Council states that in FY 2015-2016, state agencies in Florida spent more than $173 million to manage 3.4 million acres of conservation lands.  Accounting for tourist revenues of approximately $79 million, the net cost to taxpayers for maintenance of conservation lands was $94.6 million or $28.23 per acre.[x]  Such expenditures are sure to increase and will be incurred every year.

The inherent tension is a result of an economic concept called “opportunity cost.” State revenues are fixed by our tax structure. Every dollar we spend on one service is a dollar not being used to support another service. We elect our state representatives to make those policy decisions and best reflect our overall governing philosophy. Often, typically around election cycles, we will be treated to concerns from groups that bemoan inadequate levels of funding for everything from public schools to mental health to public safety.

Based on the 2016 Annual Report above and assuming an acquisition cost of $2,500 per acre (which is the average price per acre in the Florida Forever and Preservation 20008), the acquisition of 20,000 acres for conservation would a one-time cost of $50 M.   But, an additional annual maintenance cost of nearly $565,000 would be incurred and added to an already stretched state budget.  This, in turn, further removes potential funding to meet the needs of Floridians.

Another often overlooked stress on the state budget is the cost of debt service.  The Office of Economic and Demographic Research reveals, “To date, the state has issued approximately $2.0 billion of Florida Forever bonds. The most recent year that new bonds were authorized was Fiscal Year 2008-09. As of September 2016, the aggregate principal amount of outstanding bonds is $1.0 billion, with debt service of approximately $145.2 million due in Fiscal Year 2016-17.51 If no new bonds are sold, the estimated debt service is expected to decline each year through Fiscal Year 2028-29, at which time the Florida Forever bonds would be retired.”[xi]

But, that is not all, Budgetary stress is also felt at the local level.  County and municipal budgets are funded primarily from property taxes. Property owners’ taxes fund road maintenance, law enforcement, social workers, growth management, environmental protection, and flood control, just to name a few spending categories.

Government purchases take property off the tax rolls.  That means less tax revenue with which to provide necessary services.  This puts local governments in the difficult position to either reduce services or raise taxes on the remaining taxpaying private properties.  Increasing government land ownership inevitably creates a negative ripple effect both locally and state-wide.

The Founding Fathers never intended for government to be a land holder.  They wrote into our Constitution specific provisions for the limited cases in which government could purchase private property.

Today, no one feels the impact of massive federal government ownership and its financial strains like states and their citizens in the west.  Florida policymakers could learn much from the western example of government land ownership and work to curb the never-satisfied desire to control more and more land.  Those living in the west continue their pursuit of seeking the American dream and living the fundamental values of self-determination, individualism and self-reliance. Many Floridians do, too.  However, Floridians already help pay for the subsidies western states receive due to massive government ownership and the costs incurred. The question remaining to be answered is: Will Florida consider the costs of allowing government to own more and more land while losing economic opportunities to benefit its people?

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Matt Anderson is director of Sutherland Institute’s Coalition for Self-Government in the West. He has been featured in local, national and international media, including BBC, NPR, C-SPAN, Buzzfeed, the Washington Examiner and a variety of Associated Press articles. Matt is a regular contributor to The Hill and Deseret News.

Matt graduated from Utah State University in 2014 with a bachelor’s degree in political science and is pursuing a master’s of political science with an emphasis in public lands policy. He is an active member of his community – volunteering on political campaigns, serving as a state delegate and precinct chair – and he is involved with a number of conservation organizations. When Matt isn’t working on public policy, you are likely to find him in Utah’s Bear River Mountain Range fly-fishing, hunting or ATV riding.

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