Bi-Partisan Land Grab

Bi-Partisan Land Grab

May 01, 1999

The Clinton administration’s current budget proposal for fiscal year 2000 includes $1 billion for a new "Lands Legacy Initiative." The proposal seeks $422 million to purchase new federal lands and $588 million for acquisition of land and conservation easements by state and local governments, private land trusts, and other non-profit groups. The administration would wait a year, but it too promises a plan in the 2001 budget for "a permanent funding stream" to continue the high level of federal and state land acquisitions. Most of this money would be handed out by Bruce Babbitt’s Interior Department.

House Resources Committee Chairman Don Young (R-Alaska) does not normally find much common ground with Babbitt. In this case, however, it seems he is trying to do him one better. Not willing to wait a year, Young is pushing H.R. 701 – the Conservation and Reinvestment Act of 1999, a bill that would permanently commit up to $900 million annually for off-budget federal, state and local land acquisitions. According to Young, this bill is the top legislative priority of his committee this year.

Under Young’s bill, there would be no need for further federal appropriations to spend funds from the Land and Conservation Fund. Each year, 42 percent of the available money would automatically be used for new federal land acquisitions. An additional 42 percent would automatically go to states and 16 percent to local governments. Title III of the bill would provide still another guaranteed $400 million per year for wildlife enhancement and habitat improvement. These funds would come from existing royalties and other revenues from federal outer continental shelf (OCS) oil and gas leasing, currently yielding about $4 billion annually and about the only federal program today that actually makes any real money for taxpayers.

At present, Young complains, almost all of OCS oil and gas revenue is simply turned back to the federal treasury, where it has been used for deficit reduction. Now that the era of deficit reduction is over, however, Young and other members of Congress see a new opening for all manner of ways of spreading federal money around.

Hoping to put together a winning political coalition, Young has combined his land acquisition funding with a new revenue–sharing program for "impact assistance" to states supposedly affected by the development of federal oil and gas leases on the outer continental shelf. Combining all the parts of the legislation, it would distribute a grand windfall of $205 million per year to Texas; $125 million to California; and $83 million to New York State. Great Lakes States, such as Michigan and Illinois, would get millions more, as Young’s bill redefines them as "coastal" states for the purposes of revenue sharing. It should come as no surprise that Young’s home state of Alaska would be an especially large winner, slated to receive $150 million annually.

A past bitter critic of federal land management in Alaska and elsewhere, Young is sensitive to criticism that he has suddenly changed his stripes. Seeking to ward off charges that he is now promoting a major expansion of the federal domain, the bill would limit federal acquisitions to lands currently located within existing federal parks, national forests, and other federal land systems. It would prohibit use of the funds to acquire lands by means of condemnation and would require that two-thirds of the money for federal acquisitions be spent east of the 100th meridian.

Young has a valid point that some private inholders within national parks and other federal land systems have been waiting around for years, unable either to develop their land or to get the government to pay for it. Also, if the government is going to effectively "take" lands for purposes like endangered species protection, it is better that the lands be paid for outright, as opposed to an uncompensated taking by regulatory means. There may be other limited circumstances where governments may require new lands for legitimate purposes.

If helping inholders and acquiring sensitive lands is Young’s intent, he is going about it the wrong way. His proposal would undermine an existing system that has been working tolerably well to meet whatever valid federal acquisition needs exist. It would be much better to take steps to improve this system, without expanding the amount of land owned by the feds, rather than to give a large boost to the total area of government land ownership nationwide.

Since the mid–1980s, when funding for new federal acquisitions was scarce due to concern about the federal deficit, federal land agencies have significantly expanded their program of land exchanges. Thus, in 1979 the total area of federal lands exchanged out of federal to newly private ownership amounted to 31,620 acres. By 1989, the level of federal lands transferred that year to private ownership had reached 231,008 acres.

Typically, the lands leaving federal ownership have been near urban areas or otherwise had high commercial value and development potential. The lands acquired by the government in exchange have typically been in parks, wildlife refuges, wilderness areas and other rural places of environmental significance.

As a means of federal land acquisition, exchanges have the great advantage that they, in effect, implement a no-net-gain policy (measured in terms of money value) for federal land holdings – a policy that should maintain "no net loss" of private property as well. The federal government already owns one-quarter of the nation – one out of every four acres. Notably, the federal government owns almost 50 percent of the land in western states. California, for instance, is comprised of 45 percent federal land – including national forests, national parks and lands held by the Bureau of Land Management. In an ideal world, much of this land would be transferred to state ownership or privatized. In the real world such steps have been politically impossible, however. A no-net-gain policy for federal land may be the best option until there is support for divestiture of federal land.

Exchanging lands is admittedly a cumbersome procedure – a form of barter really, in contrast to the normal cash workings of a market economy. In the past, land exchanges have often generated bitter disputes about the valid fair market value of the lands involved. The many steps in the process of completing exchanges have often taken years.

A superior method of conducting land transactions would be to buy and sell land with the customary medium of money. The desirable feature of exchanges – holding to a no-net-gain policy – could be maintained by mandating that federal acquisitions must be balanced by disposals. Any new federal acquisitions thus would have to be funded by new revenues from sales of existing federal lands.

Enacted in the closing hours of the last Congress, the Southern Nevada Public Land Management Act of 1998 – widely supported among Nevadans – illustrated the attractions of such an approach. This new law directs the Bureau of Land Management to sell federal lands inside the urban boundaries of Las Vegas. The city of Las Vegas is the fastest–growing in the United States and disposal of existing federal lands is needed to accommodate further growth.

The Congressional Budget Office estimated that the sales of federal land in the Las Vegas area are likely to yield around $300 million over the next five years. Much of the money will be used to pay for acquisition of existing private inholdings within national parks, national forests, and other environmentally sensitive places. Any such federal land acquisitions are required to take place within Nevada. Compared with the proposed acquisition strategies of the Clinton administration and Young, the Nevada legislation, whatever its problems, offers a much superior model.

There is already too much federal land in the West. Seemingly abandoning his long history of strong opposition to any expansion of the huge federal land domain, Don Young and other House Republicans now propose to add many millions of net federal (and state) acres by providing a large guaranteed flow of acquisition money for the indefinite future.

Instead, the quid pro quo for new federal land acquisitions should be that there can be no net gain in federal ownership of land. In practice, the best way to enforce such a requirement is to mandate that all future acquisitions of land by the federal government must be paid for with revenues from sale of existing federal lands.

Robert H. Nelson (rnelson@cei.org) is senior fellow in environmental studies at CEI and professor at the University of Maryland School of Public Affairs.