The debate about closing the American deficit has gotten so contentious that the Treasury Department told Congress recently that the US could default on its obligations and throw the global capital markets into chaos unless the debt ceiling is raised. One way that Uncle Sam could generate some quick cash – which is getting surprisingly little attention – is by unloading some of its vast land holdings.
The federal government makes a very modest sum each year from the sale and leasing of land–mostly for mining, drilling, and mineral rights. These amounts are too small to make any dent in the deficit. Selling some of the government’s real estate particularly in the wide open spaces in the Western U.S., however, might do the trick.
There is a precedent for the sale of federal land to help balance the county’s books, although it is an ancient one. President Andrew Jackson sold real estate in the western US in 1835, a deal that reportedly netted about $75 million. The exact amount is hard to determine because it was not sold in one lot. Nonetheless, Jackson was able to use the proceeds to wipe out the entire national debt.
Greece, which is struggling to avoid defaulting on a $157 billion bailout it received last year, will probably have to privatize some of its government-owned businesses this year and sell some of the prime real estate it owns along its coasts to avoid drowning in red ink. Its neighbors, the IMF and the EU are going to insist as much.
The US owns quite a bit of property. The federal government owns half of the land in some states. The most recent GSA (US General Services Administration) report about government land ownership was done in 2004. No one has been able to say with certainty why the audit has not been kept up because the amount of real estate the US government owns has grown most years. Congressman Tom Price (R-GA) has recently requested a complete accounting of the government’s real estate holdings.
Here is a list of the top ten American states based on the percentage of their land that is owned by the federal government. The data is fascinating. Some California forests and Hawaiian coast, for example, are quite valuable. Suggestions for sales of federal land are bound to be controversial, but that does not mean they aren’t worth considering.
This list of states with the most land owned by the federal government is not meant just to be a curiosity. There is more than one way to solve the federal deficit problem, and part of the solution lies in lands sales which would almost certainly include large parcels in this list of states.
> State Land Owned By Federal Government: 24.4 Million acres
> Total State Land: 66 Million Acres
> Percent State Land Owned By Federal Government: 36.6%
Most of the federally owned land in Colorado is managed by the National Forest Service. Most of it is in the western part of the state, where the White River, Rio Grande, and San Juan National Forests are located. A great deal of the Western Colorado public lands are leased, or are available for leasing, to timber companies, mineral, oil, and natural gas companies. Recently, two major parcels of land, totaling over 1,600 acres, were leased to an oil and natural gas extractor in Rio Blanco County this month, according to the Denver Post. Of the transaction, which totaled nearly $555,000 acres, the state received just under half of the proceeds.
9. New Mexico
> State Land Owned By Federal Government: 32.4 Million Acres
> Total State Land: 77.7 Million Acres
> Percent State Land Owned By Federal Government: 41.7%
Federal land in New Mexico has many uses. Large amounts of land are managed by the Forest Service, the Bureau of Land Management, and the Department of Defense. The federal government is often reluctant to sell its land. Many are worried that preservation measures are preventing growth, however. New Mexico Congressman Steve Pearce recently claimed that protections for the dunes sagebrush lizard would lead to economic devastation in the region. Approximately 15% of more than 22,000 acres where leases are proposed for the second half of this year contains dunes sagebrush lizard habitat, an ecologist from the Center for Biological Diversity told Bloomberg. This land would be restricted if the lizard remains on the Endangered Species List, and therefore remain undeveloped.
> State Land Owned By Federal Government: 26.4 Million Acres
> Total State Land: 62.3 Million Acres
> Percent State Land Owned By Federal Government: 42.33%
The Bureau of Land Management, The Bureau of Reclamation, and the U.S. Forest Service own and manage major tracts of land in Wyoming. In addition, the National Parks Service owns the 2.2 million acre Yellowstone National park in the northwest corner of the state. According to energy and metals publication Platts, the Bureau of Land Management is considering a bid of nearly $300 million to lease a tract to Antelope Coal to harvest in the region. According to the article: “The sale of the West Antelope tract, which spreads out over 2,837 acres southeast of Wright, Wyoming, also marks an important milestone for the state’s coal industry, which has faced unexpected legal hurdles in the usually smooth federal leasing process.” The report states that the biggest of these hurdles has been lawsuits from environmental groups.
> State Land Owned By Federal Government: 45 Million Acres
> Total State Land: 100.2 Million Acres
> Percent State Land Owned By Federal Government: 45.3%
California has massive tracts of federal land overseen by the Forest Service, the National Parks Service, and the Bureau of Land Management. Some of this land has been leased for oil drilling in recent years. There is now a large push to use public land in California to develop solar energy. Encouraged by tax incentives and loans, companies such as Chevron, BP, Morgan Stanley and Goldman Sachs have set up solar projects in California’s open deserts. In fact, eight major solar projects were set up in Southern California in 2010 alone.
> State Land Owned By Federal Government: 34.9 Million Acres
> Total State Land: 34.9 Million Acres
> Percent State Land Owned By Federal Government: 48%
Arizona’s federally owned and managed lands cover roughly half the state, with large sections of land owned by the U.S. Forest Service, the National Park Service, and the Department of Defense. One particular section of federal land under the Bureau of Land Management’s purview called “the Arizona Strip” has become the subject of intense debate because of its rich uranium and vanadium resources. According to the Uranium Investing News, the Department of the Interior is considering issuing a 20-year ban on development of roughly 1 million acres on the strip because of its proximity to the Grand Canyon National Park.
> State Land Owned By Federal Government: 26.5 Million Acres
> Total State Land: 52.9 Million Acres
> Percent State Land Owned By Federal Government: 50.1%
Approximately 96% of the public lands in Idaho are controlled by either the US Forest Service or the Bureau of Land Management, according to the University of Idaho. The main use of this land is for forests and wildlife followed by grazing. The majority of this land is preserved by government agencies and rarely sold off.
> State Land Owned By Federal Government: 32.7 Million Acres
> Total State Land: 61.5 Million Acres
> Percent State Land Owned By Federal Government: 53.1%
Of the nearly 60% of state land owned and managed by the federal government, most of it falls under the jurisdiction of the U.S. Forest Service or the Bureau of Land Management, with smaller portions controlled by the Fish and Wildlife Service. The land is a major source of lumber, and logging is one of the biggest industries in the state. The controversial Northwest Forest plan, created in 1994, dramatically reduced the level of logging and sale of lumber property in the region.
> State Land Owned By Federal Government: 30.2 Million Acres
> Total State Land: 52.6 Million Acres
> Percent State Land Owned By Federal Government: 57.4%
Utah is a valuable example of the ways in which federal usage of public lands can coincide with local interests. The state sued the Secretary of the Interior this month after Interior Secretary Ken Salazar created a new “wild lands” designation to preserve 6 million acres of federally managed lands. According to the state’s lawsuit, the new policy would illegally prohibit the land’s development. There are also hearings going on in the state to consider the environmental implications of mining in Utah’s San Rafael Swell and Book Cliffs area, a move which has been previously approved by both the federal government and the state.
> State Land Owned By Federal Government: 252.4 Million Acres
> Total State Land: 365 Million Acres
> Percent State Land Owned By Federal Government: 69%
Alaska has by far the most land mass of any state in the union and, because of its location and late entry into statehood, much of the land is still owned by the Federal Government. Of Alaska’s 365 million acres, roughly 250 million, about 70%, are publicly owned. Alaska is the only state in the country where the majority of public acreage is under the jurisdiction of the Fish and Wildlife Service. Almost all the rest is controlled by the National Park Service. Government land has been the source of several controversies in the past few decades, notably surrounding the Arctic National Wildlife Refuge and the oil reserves there. Last July, 1.8 million acres of land went up for lease bidding for oil contractors.
> State Land Owned By Federal Government: 59.3 Million Acres
> Total State Land: 70.2 Million Acres
> Percent State Land Owned By Federal Government: 84.5%
Nevada has by far the greatest amount of its land owned by the federal government compared to the other states. The majority of land in the state is managed by the Bureau of Land Management. As a result of the Southern Nevada Public Land Management Act of 1998, money made from sales of federal land in Nevada stays in the state. The state has taken advantage of this, making $3 billion by auctioning off unused lands to private buyers, then using funds to develop state infrastructure.
Article By: Douglas A. McIntyre, Michael B. Sauter, Charles B. Stockdale (24/7WallSt)