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Shock Study: Feds Are LOSING Money Managing Public Lands

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Michael Bastasch Contributor
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The federal government loses 27 cents on average for every taxpayer dollar spent managing hundreds of millions of acres of public lands, according to a new study.

States land trusts, on the other hand, actually earn a huge return managing public lands: about $14.51 on average for every dollar spent, according to a study by the free-market Property and Environment Research Center. In contrast, PERC found that federal lands only get a return of 73 cents on average for every dollar spent. The study concludes that transferring federal lands to the states would be a win for taxpayers.

“By nearly all accounts, our federal lands are in trouble, both in terms of fiscal performance and environmental stewardship,” write PERC public lands experts Holly Fretwell and Shawn Regan. “On average, states generate more revenue per dollar spent than the federal government on a variety of land management activities, including timber, grazing, minerals, and recreation.”

PERC’s study compared U.S. Forest Service and Bureau of Land Management stewardship to state land trusts in Montana, Idaho, New Mexico and Arizona. What they found is that restrictive federal laws and poor incentives for bureaucrats costed taxpayers $2 billion from 2009 to 2013.

In that time, BLM and the Forest Service spent $7.2 billion managing lands, but only earned about $5.3 billion in revenues — a net loss of nearly $2 billion. All the while, four western states spent just $16.5 million on management and earned $240 million in revenues.

“The Forest Service generated just 10 cents in revenue for every dollar it spent from 2009 to 2013,” according to PERC’s study. “The Bureau of Land Management, however, earned a financial return of $3.11 for every dollar spent, primarily from mineral leases.”

But even though the BLM is earning a return on every dollar spent due to mineral leases, it still pales in comparison to state land trusts. New Mexico generated $41 for every dollar spent on management, mainly due to mineral leases.

PERC also breaks down how much revenue federal agencies are making by managing grazing, timber and recreation.

For example, PERC found that when it comes to timber “Montana and Idaho earned $2.51 for every dollar spent on timber management from 2009 to 2013” and both states “earned an average of $114.60 per thousand board feet (mbf) sold.” In contrast, “the Forest Service lost $148.90 per mbf sold and the BLM lost $197.71 per mbf sold.”

“‘Analysis paralysis,’ ‘gridlock,’ and the ‘Gordian knot’ are all terms used by former Forest Service chiefs to describe the lengthy planning process that hampers the ability of forest managers to actively manage federal forests,” PERC notes.

When it comes to grazing, minerals and recreation, however, federal agencies are generating a return, but it’s still well below what state land trusts are able to deliver. For example, PERC found that “mineral production from federal lands earned taxpayers $19.76 for every dollar spent” while state land trusts earned $138.08 for every dollar spent on mineral management.

“There is, however, plenty of evidence that federal minerals management is not generating a fair return for U.S. taxpayers,” PERC noted.

In the past few years, there has been a growing movement among western states to take control of federal lands, which they say are being mismanaged. The Reno Gazette-Journal reports that some 11 states have introduced bills this year asserting more state control over public lands.

The federal government owns about one-third of the land in the U.S. and most of these holdings are in western states. In states like Utah and Nevada the federal government owns 66 percent and 88 percent of the state, respectively. So it’s easy to see why they’d want to take back lands that could generate revenues.

But is federal land management actually costing taxpayers? The Interior Department says it’s activities generate $360 billion in economic activity and provide more than 2 million jobs. The Department also claims the government earns $4 for every dollar invested in the Land and Water Conservation Fund.

The Interior Department’s figures, however, are based on “economic contributions” and not the net economic benefits its activities deliver. The Department notes that “economic contributions analysis should not be equated to an analysis that measures net economic benefits” because net economic benefits “are a measure of the extent to which society is better (or worse) off because of a given policy, program or event.”

“Economic contributions analysis estimates the total output, value added, and jobs supported by a flow of expenditures through the economy,” the Department said.

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