Utah Issues
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Visit the Library of Congress to view the text of the Utah Recreational Land Exchange Act of 2009, H.R.1275 and S 390.
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Utah, after all, ranks near the top among states in the amount each taxpayer pays for education — yet it is last in per-student spending for schools because large families are prevalent.
State School Fund History
Utah is divided into square townships that are 6 miles on a side. Under the terms of the Utah Enabling Act, Congress granted the state Sections 2, 16, 32, and 36 in every township, creating a regular grid of more than 9,000 square-mile parcels. In addition, the state received 1.6 million acres to fund higher and special education, bringing the original total to about 7.5 million acres.
Right away, people began purchasing choice parcels for their ranches, mining claims, and developments. In the first century of statehood, more than half of the trust estate (4 million acres) was sold off for prices that seem extraordinarily low, even allowing for inflation — some for as little as $1.50 an acre. The proceeds were mostly handed over to the schools for current expenses. This liquidation of assets directly violated 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 $41M — 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 included in this urban portion of the trust estate was sold, along with 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.
Clearly, the schools and the taxpayers need all the help they can get. So, trust administrators became much more aggressive about leasing lands for minerals and hydrocarbons and 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. Because of all these changes, the permanent fund has been growing by about $35M a year since 1996, blooming up to a total of $333M by 2004. It would be a mistake, though, to assume that payments from the fund will affect the quality of education in Utah significantly.
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