An experiment in privatizing public land fails after 14 years

This essay asks some good questions about trust-based management of federal lands. However, the Valles Caldera may not be the best example for evaluating such trusts. A trust on productive timberlands (say, here in Western Oregon), with a mandate to provide sustainable revenue to counties, could succeed, I think.

Article follows….

 

An experiment in privatizing public land fails after 14 years

By Tom Ribe/Writers on the Range

It is no secret that some state legislators in the West want to boot federal land management agencies from their states. They argue that agencies like the Bureau of Land Management and Forest Service cost too much and are too detached from local values, and that states could make money by running our vast open spaces like a privately owned business.

The Cato Institute, a Washington, D.C.-based libertarian think tank, is of that opinion and has developed models to replace federal agencies with private interests. What many people don’t know is that Congress implemented one of the Cato Institute’s ideas in 2000, on the 89,000-acre Valles Caldera National Preserve in New Mexico. For some critics of the federal government, this was the experiment in land management that would signal the end of the BLM and Forest Service in the West.

The Cato experiment in New Mexico, however, failed, chewed up by the friction between monetizing the “services” that landscapes provide — recreation, timber, grass, wildlife — and fulfilling citizens’ expectations for public access and protecting natural resources. For example, New Mexicans had very little tolerance for paying high fees to visit public property that had already been paid for using federal Land and Water Conservation Fund dollars.

The Valles Caldera experiment began after a Texas oil family expressed interest in selling its large property atop a dormant volcano near Santa Fe. A reluctant Sen. Pete Domenici, R-N.M., agreed to federal ownership, but only if the property was not managed by traditional federal agencies. The Valles Caldera Preservation Act, which was passed in 2000, was designed to create an alternative model of management.

Under this act, the Valles Caldera National Preserve was managed by a “Trust” and mandated to become “financially self-sufficient” by 2015. The Trust was authorized to replace federal appropriations with income from recreation fees, resource extraction, and any other means that could be found. A mostly private-sector “board of trustees” made decisions and supervised the staff.

At first, Congress instructed the Trust to pay for all wildland fire operations at the preserve out of its own budget. A later congressional amendment made firefighting once again the responsibility of the Forest Service. Soon after, two large fires burned 53,000 acres in the preserve and cost the federal government $56 million dollars in suppression costs alone.

Despite the efforts of many trustees and the staff for 14 years, the preserve never managed to earn enough money from hunting, grazing and tourism to pay even a third of its bills. Heavy logging and overgrazing had depleted forests and grasslands well before the preserve became public land. High fees and restrictions on public access kept the income from recreation low, and to a large extent, the public continued to perceive the preserve as private land. Elk hunting paid well, but the preserve broke even on cattle grazing only by charging ranchers more than seven times what other federal agencies are charging.

Privatization supporters may say that if Congress had waived all federal natural and cultural resource protection laws for the Trust — as Sen. Domenici had urged back in 2000 — the staff could have been a fraction of its size, and the Trust could have made money developing lodges and putting thousands of cattle on the high-altitude meadows without public review or bureaucratic process.

Sen. Jeff Bingaman, D-N.M., however, refused to excuse the Trust from environmental laws. The National Environmental Policy Act, for example, requires federal agencies to study the impacts of proposed development and to consult with the public before decisions are made. Complying with these laws may be expensive, but without them, publicly owned land is public in name only.

For more than a decade, the Trust labored at becoming solvent before it admitted to Congress that it would never achieve “financial self-sufficiency.” For many critics of the experiment, the statement was a long time coming.

“We just wanted to access our preserve without all the restrictions and fees and without being called customers,” said Monique Schoustra, who works with a group called Caldera Action.

Ultimately, many factors led New Mexico’s congressional delegation to dump the “experiment” last December and transfer the Valles Caldera National Preserve to the National Park Service. What have we learned from this failure of privatization? For those who want states to take-over federal lands, there are certainly questions that must be answered first: Will states shoulder the costs of fighting large fires? Will states obey the wishes of ranchers and continue to subsidize ranching? Will states charge the public to visit once-public lands, and will states protect and restore archaeological sites, watersheds and wildlife habitat?

Then there’s the real question: How will states manage the public frustration of Westerners who live in a region where our public lands are at the heart of our cultures and economy?

Tom Ribe is a contributor to Writers on the Range, a column service of High Country News (hcn.org). He is a writer, fire manager and outdoor guide based in Santa Fe, New Mexico.

19 Comments

  1. While I don’t disagree too much with this article, I feel it is a little misleading in that the author, Tom Ribe, is the Executive Director of Caldera Action and it is not mentioned in his article. If you look into Caldera Action’s website you can clearly see they have been pushing for the Park Service to take over the Valles Caldera National Preserve and abandon the Trust-based model from the beginning. So, while I don’t strongly disagree with Mr. Ribe, I think he has a biased perspective on the ‘why’ if not the ‘what’, and that given his position with Caldera Action there is clearly a motive at work besides simply open discussion about the Caldera ‘experiement’.

    • Wow, that’s pretty cheezy on the part of “A Group Called Caldera Action.”

      The Caldera should never have been purchased, at least not for the price paid. Another thing here is, the land was supposed to revert to the FOREST SERVICE if the experiment failed — I thought it was doomed from the start, anyway. But what was so wrong about USFS merely adding in?

    • 1. Mr. Ribe is also vice-president of Great Southwest Adventures, a commercial company that offers sightseeing tours under special use permits at various public land locations in New Mexico, including Bandelier National Monument and with the NPS takeover, possibly at the Valles Caldera National Preserve too.

      2. Privatization of the Valles Caldera National Preserve has never been an issue; to claim otherwise is a distortion of facts for which the writer of the article bears full responsibility

  2. I wonder why the author talks about “subsidizing” ranching and not recreation or fire protection?Seems like any costs the unit incurs are effectively subsidized. Maybe someone can help me with why these are different??

    • A large difference between subsidized ranching and subsidized recreation is that the economic benefits of subsidized ranching inure to private individuals, while the benefits of subsidized recreation inure to the public at large. Anyone can drive up to a National Forest and hike along a trail, but only a few private individuals can make money by grazing their cows or sheep on Forest Service land for next to nothing.

      It might help to put the subsidies into context: It costs $1.65 to graze six sheep on Forest Service land for a month–all they can eat. It costs me about the same amount of money to buy a can of cat food that will last my cat two, maybe three days at the outside.

      In my opinion, private individuals should not be able to benefit so heavily from federal subsidies in a time when the federal government is so cash-strapped. I think I’ll call my fiscally-conservative congressman and let him know. *smirk*

    • I think the major difference, which is significant but perhaps wasn’t explained well, is that recreation (for the most part) and fire protection are public sector not-for-profit activities. Ranching is a private sector for-profit activity. That’s a big distinction, when the public is being asked to pay for it.

      • Firefighting has become extremely lucrative with the fire crews for hire. Of course, the firefighters aren’t the ones making the real money. With the timber downsizing and the decided lack of lower level permanent timber folks (with red cards), the Forest Service hires these commercial crews, instead, at a healthy premium. Can anyone tell me what the roadblock is in filling out crews with permanents? (As if I didn’t really know. Someone else should present other opinions as to why there are so few GS-3 to GS-7 permanent timber people.)

  3. “Will states shoulder the costs of fighting large fires? Will states obey the wishes of ranchers and continue to subsidize ranching? Will states charge the public to visit once-public lands, and will states protect and restore archaeological sites, watersheds and wildlife habitat?”

    I think he is asking about subsidies in all of these questions by asking who will pay. Will users pay enough to cover costs, or will it come from the taxpayers? With fire (and uses that don’t produce revenue), the question is whether the states would be subsidized by federal taxpayers.

    In support of the idea of “the public frustration of Westerners who live in a region where our public lands are at the heart of our cultures and economy,” yet another poll showing western support for federal public ownership and protection:
    http://missoulian.com/news/local/poll-finds-montanans-believe-federal-lands-belong-to-u-s/article_69b74e6c-2f72-50f9-8c7a-1f5f0685796c.html

    Regarding the idea that federal lands would be better off without federal environmental laws, I liked the statement: “Complying with these laws may be expensive, but without them, publicly owned land is public in name only.”

    • And that’s a disingenuous statement, Jon. Federal lands were a heck of a lot more public before all the regulations, lawsuits and closures. Remember Land of Many Uses?

      Never mind that poll is another in a long string from the reformists at Colorado College, Wally Hecox, I think is the guy.

      • “Public” in the sense that the laws open the management process up to the general public instead of those the agency would choose to talk to.

        Maybe the term “nonpartisan” needs some “truth in labeling” regulations (like “cholesterol-free”)?

  4. Did the Valles Caldera “Trust” (in name only) fail? Or did the arrangement accomplish what its designer, Mark Rey, intended? The wealthy family that owned the Baca Ranch wanted the feds to buy it for a pretty penny — over $1,000/acre for over-cut, over-grazed land. A Congress averse to acquiring more federal land was reluctant to do so. Rey came up with an elegant solution. Buy the ranch and promise that it would be financially self-sufficient in 15 years; a timeframe that ensures none of the protagonists can be held accountable for its fiscal failure.

    Financially fail, it did; spectacularly and predictably. The so-called Trust was never a fiduciary trust at all. There was no trust beneficiary that could hold the trustees accountable for their dismal financial under-performance. Without a beneficiary, the arrangement was not a trust; it was a federal agency loosely governed by a volunteer board. With the overwhelming majority of this agency’s funding coming from Congress through appropriations, it was only a matter of time before the Park Service was able to swoop in and consummate the acquisition that Mark Rey had in mind all along. Kudos to Mark. He federalized 90,000 acres of private land.

Leave a Reply

Your email address will not be published. Required fields are marked *