SALT LAKE CITY — A study commissioned by the state and performed by economists from a trio of Utah universities says the transfer of federal lands to Utah control could be profitable and revenues would cover the costs of managing the lands.
The 784-page report was mandated after the 2012 passage of the Transfer of Public Lands Act and was carried out by the University of Utah’s Bureau of Economic and Business Research, Utah State University and Weber State University.
Utah Gov. Gary Herbert said lawmakers and the public will be well-served by the report.
“It is important to make decisions based upon a thorough review of accurate, relevant information,” Herbert said, adding that the analysis will provide policymakers with a sound platform to assess both the risks and challenges associated with the move.
While conceding the transfer of 31.2 million acres of land managed by the federal government would pose a major shift in the "economic structure" of the state, the report goes on to say that the land transfer could actually be profitable for the state if oil and gas prices remain high and if Utah aggressively manages its mineral lease program.
The report noted:
• The cost to Utah for managing those transferred lands would be about $248 million by 2017 — the year researchers assumed the state would first have control of the lands. Maintaining revenue sharing payments to counties would add nearly another $32 million, bringing the total cost of managing lands in 2017 to almost $280 million.
• Revenues in 2013 were nearly $332 million from lands in Utah managed by the Bureau of Land Management and the Forest Service. Of that total, mineral lease revenue accounted for $308 million. Oil and gas royalties were almost $257 million.
The study said the biggest infusion of money into Utah coffers would be the elimination of revenue royalty sharing with the federal government. Utah would go from getting 50 percent of the proceeds under the current mineral lease program to getting 100 percent of the proceeds. That new money, the researchers added, would eclipse increasing taxes on any new production that came online or ramping up the number of oil and gas wells by 15 percent.
The Transfer of Public Lands Act, sponsored by Rep. Ken Ivory, R-West Jordan, orders the federal government to transfer the title of millions of acres of public land into state control by Dec. 31.
Another law required the state to have an economic analysis of the transfer performed, resulting in Monday's release of “An Analysis of a Transfer of Federal Lands to the State of Utah."
The analysis notes that should a land transfer occur, the amount of land in Utah's management portfolio would increase five-fold, and there would be immediate funding challenges hoisted on the state while the transition unfolds.
Among the most instantaneous losses would be that of nearly $150 million in federal payroll and the loss of federal dollars and equipment to fight wildfires. Researchers said of the $248 million in costs that would be shifted to Utah in 2017, 35 percent of those would be fire suppression.
Critics of the move say the study bolsters their assertions why Utah's ownership of federal public lands would be financial folly and an environmental nightmare.
“This study shows that if the state of Utah seizes public lands owned by all Americans, the only way it will be able to afford them is to sell them off or destroy them through heavy development,” remarked David Garbett, a staff attorney with the Southern Utah Wilderness Alliance. “When will the Legislature realize that the public does not want to see the Wasatch Mountains barricaded with 'No Trespassing' signs, the Book Cliffs lost to tar sand strip mines, or Arches National Park ringed with oil and gas development?”
Garbett said the study, too, fails to accurately capture the state costs of managing the land and the political realities of how that "new revenue," of mineral lease payments are already being spent by agencies like the Utah Department of Transportation. The state would have to pick up those costs, something he said the analysis did not take into account.
Despite the long-standing criticism of SUWA and other groups, the analysis does point to the economic viability of Utah taking on management of federal public lands and the toll federal land ownership imposes on the majority of the states' rural areas.
While the study said modest amounts of land owned and managed by the federal government for multiple uses was accompanied by faster economic growth in certain counties, the large tracts of federally managed land were, overall, a "drag" on economic growth.
"The turning point at which the drag begins is county-specific, but overall occurs when 40 to 45 percent of a county’s land is owned and managed for multiple uses by federal agencies," a summary of the study notes. "Twenty of Utah’s 29 counties exceed this threshold."
It notes, finally, that Utah's assuming control of federal lands would work financially, but include challenges.
"In conclusion, from a strictly financial perspective, it is likely the state of Utah could take ownership of the lands and cover the costs to manage them," the study said. "Our research also suggests that it could put a strain on the state’s funding priorities in the early years as the state adjusts to the loss of federal dollars, evaluates land resources and conditions, and develops programs to replace those now managed by federal agencies."
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