Wednesday, February 27, 2013

Takeover of fed lands could be costly, profitable

Legislation that would move the ownership and management of some federal lands in New Mexico to the state would require at least $180 million annually in new state spending and likely more. The Transfer of Public Lands Act, introduced by Sen. Richard C. Martinez, D-Espanola, and Yvette Herrell, R-Alamogordo, would instruct the federal government to give up title to most U.S. Forest Service lands and Bureau of Land Management properties. The multi-millions of acres of public lands would be transferred to the state by Dec. 31, 2015. Herrell said improper federal management of the lands has resulted in overgrown forests that create wildland fire threats. In a fiscal impact report, the New Mexico Energy, Minerals and Natural Resources Department estimated that if the lands transfers occurred, full compliance with the measure would require hiring added staff to undertake the duties currently performed by some 1,300 federal employees of the Forest Service and the BLM in the state. The total cost to for replacement state employees was estimated by the department to be more than $180 million annually, based on fiscal year 2012 budgets of $79.3 million for the Forest Service and $100.3 million for the BLM. The costs do not include expenses related to wildland fire suppression, which, based on fiscal year 2012 for the federal lands, could add another $81 million to the budget. Other initiatives would further increase the costs...more

Everybody knows that state employees don't cost as much as federal employees, and it would  take fewer state employees to manage these lands. But setting that aside, let's grant the $180 million in costs. These lands would receive better management under state jurisdiction thus lessening the fire fighting costs, but let's also set that aside and grant an additional $81 million.  That gives us a total cost of $261 million.

However, there is also the revenue side of the ledger:

The New Mexico Department of Finance noted that while the costs of managing the lands are significant, there could be a plus. New Mexico currently receives 49 percent of natural resource royalties generated on federal lands. Under the proposal, the state would receive 100 percent of royalties.  The potential fiscal impact of the additional royalty revenues was estimated at $400 million to $500 million annually.

So the worst-case scenario of the high estimate in costs ($261 million) and the low estimate of revenue ($400 million) still gives you a net benefit to the state of $139 million.  This basically says the net benefit would range from $139 to $239 million PER YEAR!  

This should come as no surprise to those who recall the 1981 NMSU study which found "Based on data in this report, however, the benefits definitely exceed the costs of a transfer."

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