New report details economic effects of transferring federal public land to state

The transfer of 31.2 million acres of land managed by the federal government to Utah would create a major shift in the economic structure of the state, according to a report released by researchers from the University of Utah’s Bureau of Economic and Business Research, Utah State University and Weber State University.

The 784-page document, completed through a collaborative effort by economists at the three Utah institutions, offers an in-depth analysis of the proposed land transfer, which was ordered when H.B. 148 passed into law in 2012. The law orders the federal government to transfer the title of millions of acres of public land into state control by Dec. 31, 2014.

After passing H.B. 148, the Utah State Legislature commissioned the report in 2013 through H.B. 142, which called for an economic analysis of the proposed land transfer.

The newly released study, “An Analysis of a Transfer of Federal Lands to the State of Utah,” responds to H.B. 142. It examines current uses of land, the economic effects and non-economic benefits of the land uses and ramifications to the state if the lands are transferred. Information on the potential costs of managing the transferred lands and suggestions for state agencies to manage areas currently under the jurisdiction of the federal government are also highlighted.

The report will be posted in its entirety on BEBR’s website. Key findings are highlighted below.

Key Findings

—The cost to Utah of managing the transfer of lands was estimated to be $248 million by 2017—the year researchers assumed the state would first have control of the lands.  Maintaining federal PILT (payments in lieu of taxes) to the counties would add $31.7 million, bringing the total cost of managing lands in 2017 to almost $280 million.

—Revenues produced on public lands are significant. In 2013, a total of $331.7 million was generated on lands managed by the BLM and Forest Service (federal agencies) in Utah. Of this, mineral lease revenue accounted for $308 million. Oil and gas royalties were almost $257 million.

  • Based on the researchers’ analysis, the land transfer could be profitable for the state if oil and gas prices remain stable and high and the state assumes an aggressive approach to managing its mineral lease program.
  • In 2013, activities on federal lands supported almost 29,000 jobs in Utah, generated $1.6 billion in earnings, and contributed $3.6 billion to Utah’s gross state product. The fiscal impacts included $788 million in tax revenue to state and local government agencies.
  • The operational purchases of the BLM, Forest Service and U.S. Fish and Wildlife Service support almost 5,000 jobs in Utah and generate $236.2 million in earnings for Utah residents. The contribution to Utah’s gross state product is almost $200 million. Tax revenues include $15.8 million in state revenue and $1.4 million in revenue for local governments.
  • Modest amounts of land owned by the federal government and managed for multiple uses are associated with faster economic growth in counties, while large amounts of federal land managed for multiple uses are associated with 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. Twenty of Utah’s 29 counties exceed this threshold.
  • The findings also show that the amount of state-owned land managed for multiple uses does not aid economic growth until state-owned land has reached a critical mass of about 15 percent of the county area. After that point, state management is associated with faster economic growth.
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