What Matters is How the Lands Are Managed

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By Holly Fretwell

Property and Environment Research Center

How land and resources are managed is less about who manages them and more about the laws and regulations under which they are managed. The outcomes of a transfer of federal lands into state hands, therefore, would hinge upon what the management system of the transferred areas would look like.

State trust land agencies, for example, are mandated to generate revenues for every activity for the benefit of schools and other public institutions. This fiduciary responsibility — which, due to its straightforward mandate, creates autonomy and flexibility for state managers — encourages decision-makers to balance various resource uses by comparing their market values.

In a study at the Property and Environment Research Center , we found that state trust managers generate significant financial returns across multiple land uses. By contrast, the U.S. Forest Service and Bureau of Land Management lose money on every activity except mineral development. Overall, the states we examined earned an average of $14.51 for every dollar spent managing their trust lands, while the Forest Service and BLM generate 73 cents for every dollar spent.

These findings are not surprising. They reflect the different statutory, regulatory, and administrative frameworks that govern state and federal lands. After all, state trust agencies are required to generate revenue, while federal land agencies are not. Federal managers have little incentive to cut costs or increase revenues because they are not required to do so.

Moreover, overlapping and conflicting federal regulations raise management costs and provide no clear mandate for federal land managers. The end result is that, compared to state trust lands, there is relatively little resource development or active management on federal lands, apart from providing general conservation protections and recreation opportunities.

More local control of public lands makes sense. Local communities have a lot to gain and lose from nearby resource management decisions. Nonetheless, good management depends on more than the level of ownership. To encourage environmental and fiscal responsibility, public land policies — both state and federal — must align the incentives of land managers with a clear desired outcome, and then give them the autonomy to find the best way to get there.

In the end, what matters is how the lands are managed. If transferred lands were managed as state trust lands, they would likely generate much greater revenues than the federal government does today. However, doing so would also greatly change what those lands are managed for.

Holly Fretwell is a research fellow at PERC and author of “Who Is Minding the Federal Estate?: Political Management of America’s Public Lands,”(Lexington Books, 2009). This article was originally published in PERC Reports. For more about PERC’s forum on public lands, go to https://www.perc.org/2017/07/27/should-federal-lands-be-transferred-to-western-states/