Sometimes, I suspect that a century from now, representatives of the government of the rump remains of the United States of America will go to Salt Lake City to beg the Republic of Deseret for kinder terms on a loan to fund the continuing U.S. war on anything innovative or profitable. The American representatives will have to order chips and salsa before they'll be served the 3.2 beer in which they'll drown their sorrows over the progress of the negotiations. Their hosts will drive a hard bargain, still nursing resentment over long-gone dominance by D.C. Utah is already establishing the grounds for that future meeting. Like most westerners, Utahns are pissed about federal control of land and purse strings. Unlike most, though, they seem serious about reshaping that relationship.
In 2012, Utah passed the Transfer of Public Lands Act, essentially demanding that the federal government surrender the two-thirds of the state controlled by Washington, D.C. Other western states are considering similar measures, but Utah paved the way.
But Utah is preparing to go a step further and plans for a future that isn't funded by federal largesse. The state passed a series of bills as part of a Financial Ready Utah movement. The problem, as the group backing the move explains, is that "More than 40 cents of every dollar the state of Utah spends comes from the federal government that borrows and/orprints more than 40 cents of every dollar it sends to Utah." Since "The current fiscal trajectory of the federal government is unsustainable," (a point agreed to by the Congressional Budget Office), Utahns foresee a day when whatever they want done will have to be paid by local funds.
Recently, Reason Foundation Director of Government Reform Leonard Gilroy interviewed Utah State Representative Ken Ivory, who plays a key role in increasing his state's autonomy. Ivory links his role in taking local control of public land in the state to the state's need for increased financial self-reliance. Said Ivory:
In the 2011 session—when we realized that over $5 billion of our state revenue comes from a federal government that's broke—that's when we started to flesh out how serious those numbers were. Something on the order of 40% of our state revenue comes from an unsustainable source in our federal governing partner. We looked at the magnitude of this risk and started to think about how we could broaden our revenue base and get to a point of economic self-reliance.
You're not going to close a revenue gap in the billions of dollars by tweaking the tax code with minor adjustments; you'd have to more than double the income tax and kill the economy. You'd have to increase corporate taxes by more than 1000%, again, killing the economy in an attempt to close that gap. On top of the general fiscal gap, in Utah we are $2.6 billion below average in annual per-pupil funding. There's no amount of nipping, tucking and tweaking in the tax code that even closes decimals on that gap. The magnitude is tremendous.
Yet, what we know from the U.S. Government Accountability Office is that there's more recoverable oil in Utah, Colorado and Wyoming than the rest of the world combined. There's a study from earlier this year by the Institute for Energy Research that there's $150 trillion in mineral value locked up in the federally controlled lands throughout the West. Right now the forests—which were a renewable resource, with the revenue funding schools, roads and public safety—have been shut down to timber harvesting, and now they're basically tinder boxes. We've got so much dead wood standing in the forests that, in fact, the FBI is even warning our state foresters that terrorists are encouraging wildfires as a form of jihad. The forests are so dense now that the trees can't defend themselves and fend off natural diseases and pests, so forests throughout the West are largely dead or dying just waiting for any spark to ignite the next catastrophic wildfire.
So we looked at these conditions. And as you pointed out, more than 50% of all land in the western United States is owned and controlled by the federal government. This is in a nation that was founded on the principles of inherent, inalienable rights to life, liberty and property. World-renowned economist John Kenneth Galbraith made a statement in the mid-1980s that "where the socialized ownership of land is concerned, only the U.S.S.R. and China can claim company with the United States."
Ivory says the enabling acts authorizing statehood for western states, including Utah, contain the same language about transfer of public lands from the federal government to state authorities as the enabling acts for states such as Nebraska. But the transfers took place for Nebraska and other states, and not for their counterparts further west. That's the lynchpin for the drive to take control of lands that are now claimed by the federal government, and to gain the financial benefits from them.
That's not a universally accepted legal interpretation of the enabling acts, but there's no doubt that federal dominance economically hobbles the western states. There's also no doubt that greater financial independence would allow for more policy variation and experimentation at the state level—especially in a region that is rather ideologically distinct from the East. It would also help to insulate states from the ongoing fiscal disaster in Washington, D.C.
By the way, as much as I respect Utah's foresight, I'm hoping that Arizonans get to watch that future meeting in Salt Lake City from the disinterested—in either party—sidelines.