Federal tax offset pays 8.5 times Marton Ranch property levy
Federal and county data appear to undercut worries that the federal conservation purchase of the 35,670-acre Marton Ranch near Casper will diminish tax revenue to Wyoming.
Wyoming politicians criticized the recent Marton conservation purchase by the U.S. Bureau of Land Management saying, in part, that the move could harm Wyoming financially. The federal government owns and controls about 44% of Natrona County, mostly through the BLM, but does not pay local and state property tax on its holdings.
The Marton conservation purchase completed last month moved 35,670 acres of private agricultural land off the county tax rolls.
Federally owned lands can “yield costly drawbacks,” Wyoming’s congressional delegation wrote in a June 23 letter to Secretary of the Interior Deb Haaland. Gov. Mark Gordon also questioned “potential impacts” to local and state tax revenues in an appeal notice filed with the Interior Department that challenges the recent $21-million purchase.
But worries about Wyoming losing tax revenue because of federal ownership do not appear to be borne out when examining the “Payment in Lieu of Taxes” program that seeks to offset impacts of non-taxable federal holdings.
PILT payments to Natrona County amounted to $3.95 million in FY 2022, the most of any county in Wyoming, according to federal records. The payments were for 1.48 million federal acres in the 3.4-million-acre county.
PILT generated an average of $2.67 for each federal acre in Natrona County, according to calculations from federal data for FY 2022.
Meantime, state and local property taxes on private Marton Ranch agricultural lands generated substantially less per acre than the PILT program, according to Natrona County assessor’s records. BLM did not purchase the Marton Ranch residential property that makes up the ranch headquarters and which is taxed at higher than agricultural rates.
On 33,324 acres of ranch property classified as agricultural, the county levied approximately $10,300 in 2021 or about 31 cents an acre. Although officials have not estimated what PILT will amount to at Marton Ranch, existing data suggests Wyoming might not lose and might even gain revenue from the BLM purchase.
Comparing the two per-acre revenues — Wyoming ag taxes versus federal PILT — reveals that the federal compensation is about eight-and-a-half times more per acre than those generated by state and local property taxes.
Delegation weighs in
This summer’s conservation acquisition of the Marton Ranch was the largest purchase the BLM has undertaken in Wyoming, the agency said last month. The acquisition will “conserve and expand access to public lands for many generations to come,” BLM Director Tracy Stone-Manning said in a statement.
That includes access along 8.8 miles of the storied North Platte River. The Conservation Fund was instrumental in the deal, made possible through the federal Land and Water Conservation Fund financed by offshore oil and gas revenue.
The BLM purchase could increase revenues to the county through PILT, increased sales tax on recreation or other factors, said Dan Schlager, the Wyoming state director of The Conservation Fund that helped assemble the purchase.
PILT helps pay for essential services like search and rescue and law enforcement that counties are responsible for regardless of property ownership. The formula for calculating the payments accounts for population and a variety of other factors.
PILT payments are not guaranteed, however. Congress must approve them each year. The National Association of Counties and other groups say the annual process is detrimental to planning.
In addition to suggesting a potential financial hit to Wyoming, the delegation and governor’s criticism go further. U.S. Sens. John Barrasso and Cynthia Lummis and U.S. Rep. Liz Cheney want Secretary of the Interior Deb Haaland to “neutralize” the purchase by identifying “disposal opportunities” for other federal property in the state.
In a two-page letter to Haaland dated June 23, the delegation also said the Interior Department should “ensure local and state approval prior to federal land acquisitions” in the future.
The federal government owns and controls “nearly half of Wyoming’s lands,” the letter states, leading the delegation to question the BLM’s need “to purchase and acquire vast amounts of additional lands in our state…”
(The amount of land five federal agencies — the U.S. Forest Service, BLM, National Park Service, Fish and Wildlife Service and Department of Defense — own in Wyoming diminished by 3.3% in the 30 years between 1990 and 2020, according to the Congressional Research Service.)
The purchase will cost the federal government down the line, the delegation’s letter said, because former Marton taxes “need to be offset by additional federal spending …” Federal land acquisitions also add to a maintenance backlog and diminish agencies’ effectiveness, the letter states.
The governor also raised the tax revenue question in his appeal notice. Gordon filed the notice with the Interior Department on June 16, saying, among other things, that BLM “simply speculated about uncertain future payments in lieu of taxes.”
That speculation assumes Congress will continue to fund the program.
Gordon also criticized a “cavalier disregard for public notice and participation [by the BLM that] violates the spirit if not the letter of the law.” The state has until July 17 to explain its protest in detail and to say what relief, if any, it is seeking.
The notice does not state that Wyoming wants the purchase reversed.
The BLM addressed various aspects of its purchase in a 24-page environmental analysis before finalizing it. The agency said a county tax base “may be affected” but that PILT “should offset any economic issues.”
“Therefore no impacts” to the socio-economic resources, the EA reads.
The document made a similar finding regarding revenue from mineral development and grazing, which Gordon also highlighted as worries. Those uses would continue under BLM ownership, the EA says.
In approving the environmental analysis, the Casper and Rawlins BLM field managers wrote that “no anticipated effects have been identified that are considered ‘highly controversial.’
“The proposed action is consistent with all federal, state, and local laws,” the managers wrote. The purchase “will not result in significant impacts on the human environment,” the two stated.
Gordon’s notice of appeal called the BLM’s 24-page analysis “cursory” and said it did not consider the potential impacts of federal ownership “in any meaningful way.” The notice reserves a bushel of indignity for the BLM’s outreach and public involvement.
The BLM started the project Feb. 16, according to the agency’s e-planning website. BLM officials approved the purchase May 18 and completed it May 23 when the agency released its decision documents, according to the website. The BLM released the environmental assessment, dated “April 2022,” on June 6.
The environmental analysis contains a very slim Chapter 5 titled “Agencies, individuals, organizations or tribes consulted.” The chapter contains five words: “Wyoming State Historic Preservation Office.”
The federal website lists Natrona County as a cooperating agency. Under the project’s “participation periods,” the BLM website lists “0,” supporting Gordon’s contention that the public was cut out.
“The State of Wyoming enthusiastically supports and often serves as a partner in the Bureau’s efforts to improve access to our public lands,” the Governor’s notice of appeal states, “but there is a right way and a wrong way to make landscape-scale decisions that directly impact the people of Wyoming. Shutting the State of Wyoming and the public out of that process was the wrong way.”
Wyoming law allows secrecy in land sales, even among government bodies, agencies and subdivisions, for reasons that are stated in legislation.
“A governing body of an agency may hold executive sessions not open to the public,” the Wyoming Public Meetings law states, “to consider the selection of a site or the purchase of real estate when the publicity regarding the consideration would cause a likelihood of an increase in price.”