At least one member of the State Land Board says that body is losing the opportunity to avoid future state budget woes by generating what would amount to billions of dollars for public education within the next century.
But other members disagree and say the calculations are misleading.The controversy is centered around school trust lands - millions of acres scattered from Lake Powell to Bear Lake - that were given to the state by the federal government on condition that all proceeds derived from the lands must be put into a trust to support public education.
San Juan County Commissioner Calvin Black, a member of the State Land Board which oversees those lands, believes that "if we were to sell off all state lands at an average of $28 an acre, with the assumption of 10 percent interest rates over 90 years - putting all of it in the school trust and compounding it - there would be about $545 billion in the trust generating interest every year after the 90 years."
Black has also developed other scenarios he says are more plausible that would also generate billions of dollars in interest revenue in a much shorter time.
But other members of the State Land Board disagree vehemently with Black's calculations. "You can make statistics say anything you want them to, and that's what Cal's doing," said board member Max Williams. "Those numbers just don't hold up."
Williams and other board members maintain school trust lands should be managed for maximum economic return, not simply to sell to the highest bidder. "We have an absolute fiduciary duty to support the school trust, not personal philosophies or interests," Williams said.
The conflicting philosophies are mirrored nationally. Some states have sold off their school trust lands, putting the proceeds into interest-bearing accounts. Others have opted to retain the lands, generating revenue instead through leases and permits.
Utah historically has vacillated between options. Currently, the State Land Board is displaying a "much greater willingness to sell state lands to private individuals," said Patrick Spurgin, director of the Division of State Lands and Forestry.
While the board is selling off state lands at a much faster rate, there is no indication the board will adopt a large-scale sale of such areas. Black himself has said there are not enough votes on the board to conduct massive sales.
At least not yet.
Conflicting philosophies over just what should be done with the state's 3.5 million acres of school trust lands has divided the State Land Board, with one faction favoring divestiture and the other maintaining the state should approach land sales with extreme caution, if not reluctance.
The dispute is centered around the best way to generate more revenue - whether through bigger interest payments, or larger land-use-generated funds - for the school trust. Currently, there is $21.9 million in the trust account.
The state gets about $300,000 from livestock permits on state lands, and about $500,000 from other surface permits, such as fire wood and access permits.
But proponents of divestiture say the state could realize considerably more revenue if it were to sell off state lands, put the proceeds in an interest-bearing account and fund the school system from the interest.
And local school districts would also benefit from putting that land on the property tax rolls. In virtually every case, more property tax revenue would be generated for districts than they currently get from the school trust.
Black said under his plan, schools would still receive the same amount of revenue they do now, but from property taxes instead of trust fund monies. The trust fund interest would be retained to augment the size of the trust generating interest.
"You're talking billions in interest every year," said Black. "The yield on that, after 90 years, would be 23 times the entire state budget now. You could fund a lot of education with that kind of money."
But Williams disagrees with the concept. "You don't just go out and conduct a massive land sale and try to unload a lot of land," William said. "You ignore the economics of the marketplace."
But even Black agrees with that philosophy. "I'm not advocating we put all trust lands up for sale," he said. "The best thing we could do would be an orderly, aggressive marketing policy."
Black points proudly to a state land sale on the Cedar Mesa near Blanding. Before the sale, the entire section of 640 acres was generating less than $50 a year for the school trust. The land was sold for $28 an acre, or $17,000, and it now generates $300 in property taxes annually.
"And the state saves the cost of managing it," he added, "and the schools get more than six times the revenue they did when the state owned it."
According to Black's calculations, the state generated roughly $900,000 from surface leases in 1983. But after allowable fees were deducted, the school fund received about $730,000, or 20 cents an acre.
Add to that the state's cost of managing those lands - about $2 million annually - and the result is taxpayers are losing more than $1 million annually on state trust lands, Black said. "State lands are big money losers," Black said.
But there is another side to the story according to Doug Bates, the state coordinator for School Law and Legislation. The state once had valuable school trust sections scattered up and down the Wasatch Front, but those lands were sold for pennies on the dollar and, in some cases, given away. No one then envisioned the future value of those lands.
"What would that land be worth now to the school trust? Millions," Bates said. "There has been a terrible legacy of mismanagement of trust lands over the years. When we sell lands now, we lose the future potential of those lands to benefit the school trust."
The problem is that school trust lands have traditionally been managed as public lands instead of trust lands. Yet the public has no more right to school trust lands than the federal government has rights to Indian Reservation lands, Bates said.
"These lands were given to the state to benefit public schools, not a community or a business or even the state as a whole," Bates said.
Black admits there are those on the Land Board who vigorously resist selling state lands. "Some see it as we are selling our birthright," he said. "But when they see the kind of interest that can be generated through sales, the land board is thinking more and more along the line of sales."
Black sees land sales as a long-term solution to what has become the state's annual budget crisis. Expenditures for public education now constitute nearly half of the state budget. He also sees it as the best way to bolster the school trust fund. "What we're getting now is peanuts," he said. "Almost any alternative is better than what we're doing now."
Williams agrees, but adds the board has always been willing to consider sales whenever a sale would result in significantly more revenue for the school trust than would leases or permits. "We're cautious about the manner of the sales, not the principle of the sales," he said.
In the last four years, the State Land Board has authorized the sale of about 9,000 acres of trust lands.