BWCAW Land Swap

Tuesday, November 04, 2008 Volume 14, Issue 9

Separating facts from myth on BWCAW land swap
By Marshall Helmberger

Separating fact from political spin is never an easy job, and that is especially so when it comes to the proposal to exchange state of Minnesota land in the Boundary Waters Canoe Area for a major chunk of the Superior National Forest. Legislators and the DNR have made a number of claims about the value of a land exchange, versus the alternative of selling the state’s 93,000 acres of school trust lands in the BWCAW (see story, page 5).

Few, if any, of the claims of legislators actually hold up under inspection, and a number of factors argue strongly against the idea of a exchange.

Here are just three examples of the myths behind the legislators’ arguments and the actual facts of the issue.:

‰ Myth: A land exchange would yield the most revenue for the state’s school kids.

Reality: A land exchange would actually mean far less for the state’s school trust fund than an outright sale of the state’s holdings in the BWCAW. The state’s recently completed appraisal put the value of the state’s school trust lands in the wilderness at about $72 million. Selling the land outright would immediately increase the size of the school trust by about 15 percent and accumulate an extra $3.5 million a year, assuming just a five percent annual average return.

A land exchange, by contrast, would yield nothing to the school trust initially. And even if the state could obtain 200,000 acres from the Forest Service (which is probably little more than a pipe dream), that land would generate a relative pittance for the school trust— no more than $650,000 a year based even on DNR’s optimistic estimates. Based on the DNR’s actual track record on the management of school trust lands, we could expect the 200,000 acres to yield significantly less than $650,000— probably half of that figure.

Over 25 years, an exchange would likely generate about $12 million for the school trust. During that same period, an outright sale would generate about $160 million for the school trust. If it’s really a matter of generating revenue, this is a no-brainer and it is fiscally irresponsible of legislators and the DNR to pursue such a reckless course.

‰ Myth: This land exchange is needed to help consolidate land ownership patterns, which would make management more efficient.

Reality: It’s absolutely true that better consolidation of ownership would be a good thing for both the Forest Service and the DNR, not to mention the counties. Each entity has scattered lands that intermingle with mixed ownerships, making access more complicated. But there is nothing that prevents the DNR and the Forest Service from sitting down and working out smaller land exchanges right now to consolidate ownership, regardless of what happens to the lands in the BWCAW. The DNR hasn’t pursued that option.

‰ Myth: DNR control of lands now managed by the Forest Service would boost the amount of logging substantially, helping to revive the region’s struggling wood products industry.

Reality: It’s possible that DNR management of these lands would increase harvest levels incrementally, but the impact on the region’s timber market would be so insignificant, that it would be virtually undetectable. The Forest Service’s La Croix District, on the west end of the Superior National Forest, currently puts out about 32,000 cords per year on approximately 160,000 acres of productive land base, or about .2 of a cord per acre per year. The DNR puts out about 400,000 cords per year on its productive school trust land base of 2.38 million acres, or about .168 cords per acre per year. Even assuming that the land the state might receive from the Forest Service is significantly more productive than other school trust lands, it still is highly unlikely that DNR management of this land would yield anything other than a trivial amount of additional timber.

And this deal gets worse. Not only would the land exchange shortchange the school trust, it would cost the counties, especially St. Louis County, several thousand dollars a year in federal funding. Counties receive money from three sources: Payments-in-Lieu-of-Taxes, (or PILT); the 25 percent Fund; and Thye-Blatnik funds. Under the plan envisioned by area legislators and the DNR, most of the federal land that would go to the state would come from St. Louis County, which means the county would lose the majority of its PILT and 25 percent money. This would easily cost the county about $400,000 a year. Lake County would also stand to lose some of this money, though not as much as St. Louis County. This is one reason why the counties have been less than enthusiastic about the land swap proposal in the past.

While the transfer of state lands in the wilderness to federal ownership would mean an extra $250,000 in Thye-Blatnik dollars, that increase wouldn’t come close to making up for the lost PILT and 25 percent funds. Over ten years, the counties could easily see a net loss of $2.5 million.

And if the DNR and legislators have their way, we could lose substantially more federal funding. That’s because the DNR is planning to seek congressional action to circumvent the federal government’s regular and very cumbersome land exchange process. The state’s congressional delegation has been reluctant to go this route in the past, because they worry it would bring attention to the Thye-Blatnik funding. The BWCAW is the only wilderness in the country that receives such funds, and our congressional delegation would just as soon leave sleeping dogs lie. Given the budget-cutting mood in Washington, the Thye-Blatnik dollars could easily be cut off, a move that would cost the three Arrowhead counties about $2.1 million a year.

That’s probably one of the reasons Congressman Oberstar says he doesn’t favor congressional action on this issue, at least not now.

To put it all in perspective, the proposal by the DNR and legislators for a land exchange will cost the state as much as $150 million in lost revenue over 25 years, cost the counties millions in lost revenue, and will likely yield little or no additional timber. This proposal isn’t just bad, It’s utterly irresponsible. It appears area legislators and DNR officials are essentially putting their egos ahead of the public interest. Unless they can shelve the false rhetoric and come up with a legitimate explanation of why the state should surrender so much money at a time of fiscal crisis, this proposal should go absolutely nowhere.