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Select federal lands attract wealthy elites, don’t benefit working class

Select federal lands attract wealthy elites, don’t benefit working class

Idaho Freedom Foundation staff
July 5, 2016

By Tim Oren | Special to Idaho Freedom Foundation

Megan Lawson’s June 16 Guest Opinion, “Federal lands support diverse rural economies,” claimed federally-owned lands promote a diverse, Western rural economy. Contrary to Lawson’s assertions, today, the economic effect of federal lands in the West is to attract wealthy elites to exclusive resort areas, with no corresponding benefit to wage earners, entrepreneurs or the poor.

In her commentary, Lawson cited a Headwaters Institute study, which used 44 years of history to claim growth benefits of federal lands. Unfortunately, that report has major flaws which affect the conclusion it and Lawson draw.

The Headwaters Institute study Lawson cited used historical data, but did not examine federal lands’ actual effect today. The study looked only at gross income, assuming that one dollar is the same, whether it is wages, profit from a farm or small business, or a dollar of welfare payments. Further, the study’s authors assumed that an acre of public land provides the same benefit, whether it is Owyhee BLM sagebrush or protected Yellowstone National Park land.

A reexamination without these assumptions reveals a truth different than the one Lawson asserts. I retrieved 2014 income data from the Bureau of Economic Analysis, separating wages, self-employment profits, welfare and other transfer payments, and investment income. I compared that to Federal land ownership in the 276 Western rural counties, sorted into protected park lands and unprotected land such as BLM and Forest Service, using a standard statistical procedure.

The results show most public lands today have little effect on rural income. The only significant effect federal lands have on rural income is an increase of per capita investment income, concentrated in elite counties located near areas of federally protected parklands, such as Sun Valley, Jackson (Wyoming), Park City (Utah), and Aspen. Investment income includes dividends and interest, private pension payments, and rents.

Individuals who have earned their wealth elsewhere bring it to the elite locations when they move or retire near parks paid for by the public. The individuals who move often enjoy lower tax rates on their passive income. The locals who benefit are those who sell or rent real estate — there is no matching, positive effect on local wages.

This pattern, of increased per-capita investment income, benefits a small number of elite locations in the West. It cannot scale up widely, because an attraction of these spots is their exclusivity. Outside of elite counties, federal lands — parks or otherwise — provide no significant economic benefits to those who draw wages, run a farm or business, or are struggling to get by.

Lawson and the Headwaters Institute have attempted to draw a mantle of social benefit over all federal lands in the West, but the federal lands actually benefit only a privileged few in elite locations. Public lands, managed from Washington, D.C., do nothing economically for most of us. That alone is a reason why we should give Western states a chance to experiment, to manage these lands, and realize greater benefits for their rural residents.

Tim Oren recently retired to Idaho after 30 years in Silicon Valley as an engineer, manager and venture capitalist. He holds a graduate degree in systems analysis and statistics from Michigan State University.

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