Utah State Land Trust Reform (Back to Landscapes Program Index)

The most important emerging conservation issue on the Colorado Plateau is likely the problem posed by School Trust Lands. These are lands that Congress granted at statehood for the support of common schools and other beneficiary institutions in nearly every western state. Explicit acceptance of the land grants in the various state constitutions created a series of compacts between the federal and state governments. These compacts impose on the states a perpetual trust obligation, which the Utah Attorney General has spelled out succinctly: "The interest of the school and institutional trust beneficiary is paramount and must always prevail over any conflicting public use or purpose." Watching out for those interests in Utah is the job of the Trust Lands Administration.

Since the trust beneficiaries in Utah include the public schools, state colleges and universities, state hospitals, and schools for the deaf and blind, who could possibly be opposed to the administrators of the trust playing financial hardball in support? Well, this is where we have to understand how much trust land there is, where it is located, and what is being done with the land to make it pay. It's a sobering story.

Utah is divided into square townships that are six miles on a side. Under the terms of the Utah Enabling Act, Congress granted to the state sections 2, 16, 32 and 36 in every township throughout the state, imprinting across the landscape a regular grid of more than 9,000 square-mile parcels. In addition, the state got 1.6 million acres to provide revenue for higher and special education needs, bringing the original statewide total of trust lands to about 7.5 million acres.

	Castleton Tower. The land between the photographer and the tower is Trust land. © by Tom Till

Right away, people began purchasing choice parcels of trust land to add to their ranches, mining claims and developments. In the first century of statehood, more than half of the trust estate was sold off for prices that seem extraordinarily low, even allowing for inflation. Nearly 4 million acres were sold, some for as little as $1.50 an acre. The proceeds, such as they were, were mostly handed over to the schools for current expenses. This liquidation of assets was in direct violation of the State's obligations as laid out in the Utah Constitution: "The State must be concerned with both income for the current beneficiaries and the preservation of trust assets for future beneficiaries, which requires a balancing of short and long-term interests so that long-term benefits are not lost in an effort to maximize short-term gains."

Legal mandates notwithstanding, by 1991 savings in the permanent State School Fund from land sales and mineral royalties amounted to a paltry $41 million, or about $10 per acre of trust land sold. This is especially significant because the most valuable trust holdings had already been liquidated. Early settlement on the Wasatch Front pre-empted designation of the full complement of trust lands there, but everything that was included in this urban portion of the trust estate was sold, as were the rich farming valleys running south down the center of the state. Salt Lake County now has just 32 acres of trust land, while remote Millard County has 403,000. Future gains in the School Fund will have to come from mineral royalties or development in the less expensive parts of Utah.

By the mid-1990s the Utah legislature noticed that the trust assets were not being converted to savings very successfully. The agency was overhauled, and its procedures modernized. A goal was set of having a billion dollars in the permanent State School Fund by the end of 2007. Utah, after all, ranks near the top among states in the amount each taxpayer pays for education, yet last in per student spending for schools, because of the prevalence of large families. Clearly, the schools and the taxpayers need all the help they can get. So, trust lands became much more aggressive about leasing lands for minerals and hydro-carbons and about trading unproductive assets within federally protected areas for potentially developable lands elsewhere. Properties are now sold at heavily advertised competitive auctions. The State Treasurer moved most of the permanent Fund out of fixed income securities and into the stock market. As a result of all these changes, the permanent Fund has been growing by about $35 million a year since 1996, blooming up to a total of $333 million by this year. It would be a mistake, though, to assume that payments from the trust fund will have a big effect on the quality of education in Utah.

The first problem is that the apparently big numbers are misleading. With the Treasurer's new policy of reinvesting dividends, statewide permanent Fund distributions for education have ranged from $2.9 million in FY 1997-98, to $7.9 million in FY 1998-99 (a one-time jump occasioned by a federal payment for trust lands traded out of the Grand Staircase-Escalante National Monument). This year's $5 million distribution amounts to just 0.15 percent of the $3.2 billion education budget in Utah. With 476,000 public school students, that is an average of just $10.50 per student this year. And, the education budget is growing far faster than the permanent Fund: between 1998 and 1999 the permanent Fund grew by $49 million while the education budget increased by $210 million. So, despite rapid growth of trust assets, interest from the permanent Fund becomes more inadequate to the task of improving education each year.

Trust land administrators predict reaching the fabled billion mark by 2007, and then paying out nearly $50 million annually. By that time, the total education budget is projected to be about $4.8 billion and growing at a rate of perhaps $240 million a year. In that scenario, Trust contributions to the schools will reach a peak of 0.95 percent of the education budget in FY 2006-07, and then fall, in an ever-declining series, as school expenditures continue to grow faster than trust assets. The tiny forecasting error in the school budget is twice as large as the total trust land payment, which is literally noise in the system.

Obviously, it is important to see what sorts of costs are imposed to create these very modest benefits, and it is here that trust lands come into focus as an important conservation issue. In southern Utah, though the grid still spreads across much of the map, land exchanges have largely removed trust lands from the national parks and monuments. These traded lands now form sprawling halos around many rural communities and solid blocks where there is revenue potential from coal, oil, gas or timber. Every highway interchange has a huddle of trust lands hoping to incubate a truck stop. Virtually every Wilderness Study Area is studded with trust lands, as are the state parks, ranches, river valleys and mountaintops. Look up your favorite getaway spot on the map and, chances are, if it isn't trust land itself, there is a parcel nearby. Though sales of some of these lands could accommodate growth and help schools, aggressive marketing and development on the scale needed to triple the School Fund could do incalculable harm to our communities, wildlife habitat, open spaces, watersheds and wild places.

Traditionally, anybody who lobbies for protection of trust land has been cast as a villain opposed to school-children. It is more likely that they are simply people who value their communities and can add. Real estate development of outlying parcels of trust land practically defines the undesirable aspects of sprawl. Growing communities would do far better to concentrate on filling in existing towns, but vacant parcels of trust land beckon at the fringes, with the allure of adjacent wild country as a selling point. Growth like that is destructive of community. Watersheds and views are compromised, wildlife habitat fragmented, local infrastructures overextended, and traditional ways of life eclipsed. Farms and ranches are forever changed as their irrigation water is bought for development purposes. Yet, despite these important consequences, trust lands are not legally subject to local zoning decisions, making it very hard to plan for their development in a way that enhances our communities.

Countless studies have shown that this kind of development costs more in new services than it generates in tax revenues. If communities have to build new water systems, expand sewer facilities or add sheriff's deputies, then the benefits to local schools will be outweighed by added burdens on the taxpayers. New school children from developments on trust land can instantly swamp trust payments, since each pupil costs about $4,000 yearly to educate in Utah. At current levels of support, one new student will nullify total trust payments to a school district with 380 students. It would be far wiser, when considering development of raw trust lands, to begin by looking at total net impact on the taxpayers, and not just at the amount of money going into the permanent Fund. After all, the taxpayers, not trust lands, are paying for the schools.

The concept of construing the benefits of trust lands more widely is an idea whose time has come in Utah. The land assets will never provide more than a minuscule level of support for the schools, but they can be of inestimable value as outdoor classrooms, recreation areas, open spaces and wildlife habitat. Trust lands can provide low cost sites for schools, parks, hospitals, extended care living facilities, and affordable housing complexes, all of which can be difficult for small communities to afford. Arizona, Colorado and Washington have all passed legislation shielding ecologically and socially valuable portions of their trust estates from development. Colorado now prohibits development of trust lands when the costs to communities are projected to exceed benefits to schools. Utah voters deserve a chance to consider a proposal at least as good. It is time for us to reconsider how to get maximum benefit for all of Utah from our spectacular trust lands.

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