A new study, released Monday, shows that the Utah State government can take over all federal BLM and U.S. Forest Service lands in Utah and manage those lands at a profit.
In short, Utah school children could reap tens of millions of dollars a year right away if Congress or the courts give Utah the 31 million acres of Bureau of Land Management and U.S. national forest lands now inside Utah borders.
The bulk of the new revenues would come in oil and natural gas well production, both those operating now and those likely to come on line in the near future.
If the feds kept the oil and gas royalties that are now flowing to the federal government, then it could take up to three years from the turnover of all the lands for Utah to make a profit in managing the old federal lands.
After about three years, once the federal lands were in Utah control, then new oil and gas royalties would catch up to the cost of managing all those federal acres, and Utah would break even and even start making money.
But if the feds immediately gave over to the state all the oil and gas royalties on the existing wells, the state would start making millions of dollars right away, the new exhaustive, 700-plus-page, report says.
Opponents to the state taking over all these federal lands have said for several years – ever since the Legislature decided to actively pursue getting control of these federal lands – that taking over mostly BLM and forest lands would cost the state a lot more to manage than it would get in new revenues.
In short, the state would lose big bucks by in taking over these lands.
And Utah school children could actually suffer if the state got control of these federal lands.
To see if that was true, several years ago the Legislature ordered that an exhaustive economic study be undertaken by economists and land specialists at three of the state’s public universities – the University of Utah, Utah State University and Weber State University.
The 18-month study was released Monday. But it is so huge and exhausting, at the same time the governor’s Public Lands Policy Coordinating Office conducted released its analysis of the report (a study of the study, if you will).
That 27-page summary, which you can read here, provides a lot of interesting detail.
As you might imagine, the economists had to make a number of assumptions – the price of oil and natural gas over the next decade just some of them.
How many wildfires will burn on the new state lands, the cost of them to be born by Utah State government instead of the federal government?
How will grazing and recreation be changed, if at all, by the transfer? And many other questions and assumptions.
What will happen to county budgets when they stop getting around $30 million a year from the federal government in the current Payment In Lieu of Taxes (PILT) program?
In short, (and considering the main report is more than 700 pages, you should be really glad its in short), it will cost the state about $280 million a year to manage the 31 million federal acres now in BLM and U.S. forest lands.
But the state will make $331 million a year in revenues now going to the federal government – for a $51 million profit.
But that’s only over the next five years or so.
As more and more new oil and gas wells are drilled on these formally-federal lands, as the lands are better managed by the state and local governments, those profits will go up into the hundreds of millions of dollars, the report predicts.
Now, many Utahns who recreate on the federal lands, or want to preserve them as mainly undeveloped, worry that Utah lawmakers will start selling off the new state lands to private entities.
The report says that shouldn’t happen – that lawmakers won’t need to sell land to make the huge land swap profitable for the state.
And without that economic need – for the conservative majority in the Legislature will NOT want to raise taxes to pay for management of the new lands – it would be much better for the state budget to keep the lands under state control and develop them in responsible manner.
GOP legislative leaders have been saying this for some time, as Democratic lawmakers painted pictures of a disaster if state government (and thus, Republican lawmakers), got their hands on all that land.
In a UtahPolicy poll conducted earlier this year by Dan Jones & Associates, Jones found that 53 percent of Utahns said the state was the best government to manage public lands in Utah.
Only 24 percent said the federal government should do it.
Fourteen percent favored city and county governments managing the public lands, and 9 percent didn’t have an opinion.
Utah State government has been controlled by Republicans for 30 years. And among Utahns who identify themselves as Republicans, the pro-state side gains greater support.
Jones found that 69 percent of Republicans feel the state government is the best place to manage public lands, only 6 percent said the federal government is best suited to manage public lands.
But the feeling switches among Democrats; 66 percent of whom said the federal government should manage public lands. Only 23 percent said the state should do it.
A bill passed by the Legislature several years ago put a Dec. 31, 2014 deadline for the feds to turn over to the state the 31 million BLM and forest lands it now controls in Utah.
The bill said if feds don’t meet that deadline, the Legislature gives the attorney general power to sue the federal government and ask the U.S. Supreme Court to uphold promises made by the federal government when Utah became a state in 1896 to return all federal lands to state control.
But GOP AG Sean Reyes recently told legislative leaders that he wanted to wait before filing such a suit, hoping that new leadership in Congress (Republicans in November won control of the U.S. Senate) and a compromise bill being pushed by Rep. Rob Bishop, R-Utah, could pass in the next several years.
Now the new report says that Utah could take over control of federal lands in the state and actually profit from a huge land exchange.
