This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
The 732-page report released by the state of Utah in November 2014 — An Analysis of a Transfer of Federal Lands to the State of Utah — performs a valuable public service by providing a wealth of previously unavailable information concerning the revenues, costs and other features of federal and state land management in Utah.
With the report, it is possible to make reasonably good estimates of the fiscal impacts on the federal government and on the state of Utah of a hypothetical transfer in 2012 to Utah of BLM lands, Forest Service lands, Fish and Wildlife service lands and the Utah portion of the Glen Canyon Recreation Area. These lands encompass 31 million acres (57 percent of the state) that are the heart of the current transfer debate.
The total federal management costs for 2012 in Utah were as follows: BLM lands ($123.3 million); Forest Service lands ($107.3 million); Fish and Wildlife Service lands ($4.6 million); and Glen Canyon lands ($16.2 million). With the addition of PILT (payments in lieu of taxes) payments, the federal grand total in 2012 came to $286.8 million.
Total federal oil and gas royalties, coal royalties and other mineral leasing revenues in Utah in 2013 were $308.0 million. The state of Utah received $138.1 million as its share of these mineral revenues, while the federal government retained $169.7. Total federal surface land revenues in 2013 were $23.7 million, with only a small part going to Utah.
If we assume for the purposes of analysis that federal land management costs in 2013 would have been the same as they actually were in 2012, the federal government under its current ownership would have incurred a fiscal deficit in Utah in 2013 of almost $100 million (total federal management costs of $286.8 million minus total federal mineral and surface revenues of $189.7). If the lands — even including all the mineral rights — had instead been transferred to Utah, the federal government would therefore have seen a gain in its net revenues of this same amount, about a positive $100 million in 2013.
For the state of Utah, if we assume again for the purposes of analysis that in 2013 the state would have replicated 2012 federal management practices and costs, it would have assumed new management cost burdens in 2013 of $286.7 million. It would have gained increased mineral leasing revenues in 2013 of $169.7 million plus about $20 million in new surface revenues. Thus, as the other side of the fiscal coin, the net fiscal impact on Utah in 2013 of a transfer would have been almost a negative $100 million ($189.7 million in new revenues minus $286.7 million in new management costs).
There are many ways in which Utah land management costs might be lower and revenues higher than recent federal levels. Moreover, according to the 2014 Utah Report, federal wildfire suppression and prevention costs in Utah averaged $76.7 million per year over the period 2008-2012.
The increased acres burned annually and intensity of wildfires in the West in recent years are due in significant part to past federal management practices on many western federal forests. If the federal government therefore maintained its recent Utah wildfire responsibilities in light of its past mismanagement, as it should, the fiscal impacts in 2013 of a comprehensive transfer of federal lands to Utah in 2012 would have been about plus $20 million for the federal government in 2013 and about minus $20 million for the State of Utah.
Federal mineral revenues, however, are an especially volatile part of the fiscal impact calculations, especially oil revenues. From $308 million in 2013, total federal mineral revenues in Utah rose to $346.0 million in 2014, and then fell sharply to $228.2 million in 2015. As its share, Utah state revenues rose from $138 million in 2013 to $170.8 million in 2014, and then fell off to $116.4 million in 2015. Instead of about a $20 million fiscal loss, as calculated above for 2013, the Utah fiscal loss from a transfer would have risen in 2015 to about $80 million (again using non-mineral revenue and cost data from 2012 and 2013, the only such detailed data now or foreseeably available).
Many strong general assertions have been made in Utah about the fiscal impacts of a large scale land transfer to the State and the ability of the state to afford such a transfer. The numbers above should help to further inform this debate.
Robert H. Nelson is a professor in the School of Public Policy of the University of Maryland. He worked as an economic analyst in the Office of the Secretary of the Interior from 1975 to 1993 and holds a Ph.D. in economics.