The Price We Pay

E-mail   Print

Public Lands Report I

By Holly Lippke Fretwell

A Summary

Full Text HTML

Our federal lands should be a rich resource to every taxpayer, not a burden, says Holly Lippke Fretwell in a revealing report on public lands published by PERC. Each year from 1994 to 1996, the Forest Service and the Bureau of Land Management lost an average of $290 million on timber, $66 million on grazing, and $355 million on recreation.

Why do these agencies lose money on a federal estate of 456 million acres that encompasses a wealth of forests, grazing lands, minerals, wildlife and recreational amenities? The answer is simple: cost inefficiency.

Anyone who earns a wage and balances a checkbook knows that spending more than you earn spells trouble--not so with our federal land management agencies. These agencies are funded by Congress and do not have to rely on their own earnings to operate. Where is the incentive to cut costs or maximize revenues, when taxpayers are footing all the bills?

In contrast, our state land agencies, which manage a similar wealth of resources, are cost efficient. The states earn a profit from mining, logging, grazing, and recreation on public lands. What's the difference, you ask? State agencies must earn revenues to support public schools. They have a strong incentive to be cost-efficient and to generate revenues.

In order to reverse the tide of red ink, Fretwell suggests that federal land managers be allowed to actually manage their lands, rather than respond to the political whims of Congress. They should be allowed to set fees, create new programs and retain revenues. And most importantly, they must fund their operations from their earnings.

With the right incentives our federal lands could be a source of wealth to all Americans, not the burden that we have allowed them to become.

Fretwell is a PERC research associate specializing in public lands. She has previously written about forestry, and funding for state and national parks.

This report is the first in a series of Public Land Reports from PERC. All four reports are available here on our Web site along with other PERC research.

"While I do not agree with every concept of 'free market environmentalism,' I believe that many of your arguments have merit. ... The important issue is setting the proper incentives in the best interest of society.""