It would cost Arizona hundreds of millions to take control of federal land, report says

There’ve been efforts over the years in Arizona to transfer ownership — and control — of federal land to the state. Oftentimes, that’s due at least in part to lawmakers’ not being happy with federal plans for that land.

But a report published earlier this year says it would cost the state a lot of money to take control of federal land, without a lot of benefit in return.

Dave Wells is research director for the Grand Canyon Institute. He joined The Show to talk more about this.

Grand Canyon Institute

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Handout

Full conversation

MARK BRODIE: Dave, it looks like your calculations found that if the state were to take on this federal land, it wouldn't be great for the state’s bottom line.

DAVE WELLS: No, the state actually doesn't have enough money to even deal with federal tax conformity this year, and to throw another $800 million annual cost onto the state, we don’t have the money to do that. So we’d either have to raise taxes or we’d have to make some really significant cuts to current programs.

MARK BRODIE: What are the costs for managing that land and sort of having it in the state’s portfolio?

DAVE WELLS: So one of the things is wildfires. And the other thing is potentially preventing wildfires. So wildfires we estimate would cost about $175 million, which is about 12 times what the state currently does because the way wildfires work is wherever it starts is who’s got to ultimately pay for it or reimburse people.

And so and we’re talking at Forest Service and BLM land, that’s about a third of all the acreage in the state and most of the really, you know, large forest-kind of acreage in the state. So that would be one part.

And the other part is mitigation, so you’ve got to it’s not very profitable to actually take all these trees out. A lot of people think that way, in fact I was talking with a forester this weekend and we were talking about the old growth forest. I said, how big were those ponderosa pines? And we were sitting at a 5-inch diameter table; he says about that big. And I go wow, you know, and they would get that way about 100 years, and now they get about 2 feet, much smaller. And that’s because they have to compete with all these other trees and all this other stuff on the ground and it’s a much more different environment. As a consequence it’s really not that profitable to be able to cut down lots of these trees, so you’ve got to pay folks to do that and that was sort of where a lot of the money goes.

MARK BRODIE: Is it possible that there could be some kind of arrangement where even if the state were to assume control of BLM land and Forest Service land, that the federal government would still assist or maybe even just flat out pay for some of these things for wildfire mitigation to help battle wildfires if and when they start?

DAVE WELLS: Well I mean that’s a possibility, I presume, but the idea would be the state essentially taking over lands that the federal government has, that’s at least the way it’s been framed in the past. And so that would mean that the federal government wouldn't have the responsibilities that it currently has, and so I think I mean I think that’s rolling the dice to basically assume that the federal government will still come in like that.

And you know that’s a big thing and the a lot of ways I like to think about it is like it’s $800 million that’s coming into the state, it’s like new money that comes into the state. And if the state has to pay for it, what they have to do is sort of rearrange the deck chairs on the Titanic kind of thing. They don’t, it’s not new money, they just have to take money that is currently being spent elsewhere or possibly raise your taxes and spend it on these areas instead.

And the federal government is a real help to our rural communities especially because this is money that’s really going to the rural part of the state. You know here in Phoenix, we’re generally doing pretty well economically even though things are a little bit sketchy at the moment, but in the rural parts of states, you know, they’re really struggling they really rely a lot on the tourism that comes in and the people use go to the restaurants and hotels and things like that.

MARK BRODIE: What are some of the other costs? I mean obviously as you say wildfire mitigation and fighting wildfires are some of the biggies, but I assume there are other costs that the federal government is currently picking up because it’s federal land that the state would have to?

DAVE WELLS: Yeah, well there’s a lot of land so there’s all these roads and all this infrastructure and campsites and things like that. I mean it’s thousands of miles of roads and so forth, and if you’ve gone on that dirt road where it turns into the rib thing or brrr-brrr-brrr, it’s you know that’s got to be taken care of and you’ve got to have these, I mean a lot of the backlog in maintenance, there’s about $200 million in backlog maintenance and a lot of it has to do with structures that have to be done.

There’s a lot of vehicles that the federal government pays for and maintains to maintain all that land. You think about the fishing that people do and perhaps up on the Rim, you know all those lakes and reservoirs have to be maintained. There’s just a lot of things that go into that part of it as well.

MARK BRODIE: Is there an argument to be made that, you know, this is land in Arizona, Arizona should be able to control what happens on it as opposed to bureaucrats 3,000 miles away?

DAVE WELLS: Oh we’ve heard that a lot, so but a lot of you know our forest workers actually live here, so I think that you know they’re pretty connected to the land. I was talking with a guy who works for the Forest Service up in Moab, Utah, a few months ago, you know he’s just he’s really connected to you know what’s going on in terms of both the wildlife that’s there and the plant life and stuff like that.

So I think you know it’s really important to keep in mind that the federal government is not just the folks the bureaucrats in D.C., and of course there are quite a few of them and that doesn't mean that they’re perfect or anything like that, but they are also people in our own communities actually work for the federal government.

MARK BRODIE: Is there an opportunity for the state to if it were to take control of this land to try to use it to generate more revenue so it wasn't a total, you know, $800 million money suck?

DAVE WELLS: Well that’s, I mean already a lot of money comes in. I mean there’s little gains here like the federal government charges very little for grazing but the state doesn't charge very much more so and there’s not a lot of money in grazing.

And there’s not, I mean there already are some recreational fees and the analysis included you know the impact of that. But there I don’t think there’s a lot of extra gain to do because there’s also a thing called payment in lieu of taxes that goes to rural communities.

So since the federal government doesn't pay property taxes they do a payment in lieu of taxes and this is actually a really significant source of revenue, so like in Graham County, about a third of their property tax is equal to about a third of their property tax, which is about a third of the land in Graham County.

So it’s roughly, you know, fairly decent trade-off and if you were to remove that the state would have to jump in. It’s about $50 million that goes primarily to rural counties based on the amount of federal land in their county, and, you know, that could mean like they’d have to increase their sales taxes by about half a cent to make up for that or the state would have to do something. And those are pretty significant impacts to those rural counties.

MARK BRODIE: Could the state sell that land? I mean could they sell it for housing or to an energy developer or something and bring in money that way?

DAVE WELLS: Well they could, except I mean if you think about the state trust land, it’s, the most lucrative state trust land is on the periphery of the like the Phoenix area and so forth.

MARK BRODIE: Near the cities.

DAVE WELLS: And that’s not where most of the Forest Service land is. And I think you’d end up, that’s where you’ll end up with like a lot of litigation in that case and generally the public wants to be able to access these lands.

MARK BRODIE: Am I right to assume that all of this presupposes that the federal government is actually doing the things that it has been doing on this land? It is, for example, paying to fight wildfires on federal land and is continuing to pay to maintain roads and lakes and things like that. That maybe this calculation would change a bit if the feds decided not to do those things?

DAVE WELLS: Yeah, certainly there’s been a lot of disruption to the federal government since the current administration took power and there’s been a lot of folks who’ve lost their jobs and or been on leave and stuff like that.

So yeah, certainly I think this you know is a period of change, but the forester I talked to thought this was also an opportunity to sort of reinvent some aspects of the Forest Service. I mentioned about the bureaucratic aspects of it, and he really thought that this was an opportunity to make some changes and that this would be an opportunity to sort of recalibrate things and the federal government could perhaps you know do a better job as we sort of move forward and think through this. So that was his view and I’d be hopeful about that kind of thing.

MARK BRODIE: All right, that is Dave Wells, research director at Grand Canyon Institute. Dave, thanks as always, I appreciate it.

DAVE WELLS: Oh, thank you.