Who owns land in Teton County plays out in a quilted kaleidoscope of colors on county maps. There’s light green for national forest, dark green for national park, yellow for the National Elk Refuge, white for private land — and then there’s pink.
Zoom in on the pink squares, and you’ll find state trust lands — property the federal government doled out to western states at their founding to help pay for public institutions like schools.
Teton County is home to 4,615.81 acres of state trust land. In fiscal year 2017 those lands generated $105,564.94.
As Wyoming looks for long-term ways to pay for schools, attention has turned to whether the state is doing all it can to squeeze as much value as possible out of those trust lands. One Jackson Hole resident is pushing for the state to sell more of the land to cut management costs and raise revenue.
“Teton County is high-dollar property,” Kate Mead said.
A rancher, school board member and attorney, Mead wants to see the land make more money for schools than they now earn.
“It’s just sitting there, pretty much sitting there,” Mead said. “It could start to really add up over time.”
Wyoming has about 3.5 million surface acres of trust lands statewide. About 86 percent, or 3.1 million acres, generates revenue for the common schools fund, making them of interest to lawmakers (see sidebar) looking to make up an ever-looming education funding shortfall.
In fiscal year 2017, state trust lands generated $236.2 million for schools through income from land sales, mineral royalties, rentals, leases and investments. That included $46 million for selling an Antelope Flats parcel in Grand Teton National Park to the federal government for permanent conservation.
The remaining 14 percent of lands, meanwhile, make money for other beneficiaries like the state’s general fund, the penitentiary, Wyoming State Hospital, the University of Wyoming, the Department of Health, public buildings in the Capitol and more.
An education cash crunch
In 2017 schools lost $77 million to state cuts. In 2018 lawmakers voted to cut another $27 million from school budgets — $8 million in fiscal year 2019 and $19.3 million in 2020.
This year the state Senate and House of Representatives are butting heads over whether to keep slashing. Lawmakers entered the session mulling an external cost adjustment for schools — essentially an increase in funding, including for teachers’ salaries, to keep up with inflation. The Legislature’s Joint Education Committee and Joint Appropriations Committee started with a proposed external cost adjustment of $18 million. Since then the Senate has moved to cut that amount in half, dropping it to $9 million, while the House has gone in the opposite direction, proposing increasing it to $37 million.
Critics of cutting the inflation adjustment contend that such a move could violate constitutionally-mandated funding requirements and open the state up to lawsuits.
When Wyoming became a state in 1890 the federal government granted it 4.2 million acres.
The trust lands are managed by the Office of State Lands and Investments, also known as OSLI. The Wyoming Constitution and state laws require the state trust lands to be managed to create a long-term growth in value and produce optimum, sustainable revenue. Jason Crowder, assistant director of the Trust Land Management Division, said the goal is to “maintain what we own and just make what we own work better.”
The Board of Land Commissioners and the State Loan and Investment Board, made up of the governor, secretary of state, state treasurer, state auditor and superintendent of public instruction, has final say over what’s done with the land. The board can vote to purchase, sell or exchange land — resulting in 30,000 acres added since 2005.
The 16th and 36th section (each a square mile) of every township (36 square miles), were designated as state school trust lands — creating checkerboards that can be tricky to manage.
State trust lands here in Jackson are used for everything from grazing to a cell tower, a water storage tank and emergency operations center. Colter Elementary School, Teton County School District No. 1’s administrative building, bus facilities and athletic fields are on state trust lands, which make money for education and benefit the district through affordable lease rates.
Mead: Sell more, lease less
Mead is pushing for the state board to sell more pieces, especially when the land is leased for grazing and partly or fully surrounded by a rancher’s private land. Selling the land could generate income through interest earned on sale proceeds and through property taxes collected on the parcel once it becomes private.
Oil and gas drilling on state trust land pays the biggest part of total revenue, about 43 percent. Coal mining comes in second, amounting to about 23 percent. Although money generated from grazing leases is puny in comparison, it’s one of the primary uses of state trust lands in Teton County.
Mead raised the idea informally with Teton County lawmakers before the 2019 Legislature swung into session. Asked if there was anyone else pushing the idea, she laughed.
“Nope,” Mead replied. “I’m sort of out there.”
Mead said the “obscure nature” of state land tends to keep the Legislature at arms-length from any major action.
“The biggest reason is that people don’t understand it,” she said.
Mead, a former lawyer for the Arizona attorney general, is intimately familiar with state land policy. Arizona, a desert state, had four sections of state trust land allotted per township, double the Wyoming allotment.
Selling some lands instead of managing them, Mead argues, would save the state money. For fiscal year 2017 the OSLI operating budget for just land trust management was $22.5 million. Plus, she believes leasing doesn’t always encourage proper care of the land. Although mineral leases are usually awarded through a competitive bid process, grazing and agriculture leases allow a preferential right to an existing lessee.
“Ranchers will say, ‘I have to use it every year so I’m going to take very good care of it because I need it to be productive,’” Mead said. “You know, some of them are like that. Absolutely. But there’s plenty that aren’t. It’s probably 50-50.”
The Mead Ranch leases a parcel in Hot Springs County. Mead said they’d consider buying it.
“I think we would apply to purchase it,” she said
But she’s unsure if many others would follow suit.
“Everybody looks out for their own economic interest,” she said.
Ranching should be considered
Other ranchers are wary of Mead’s sweeping idea to lease less lan for grazing and make the lessee buy the land instead. There are six grazing leases in Teton County, totaling just over 2,602 acres and collecting $21,500 in yearly leases. Snake River Ranch leases 1,280 acres, Patricia Hardeman and Paul Vongontard each lease 640 acres, The Lockhart Cattle Company leases 22.95 acres and Kelvin Stirn leases 19.09 acres.
Hardeman subleases her parcel to Glenn Taylor, and said her family has a long history with the land that she’s hesitant to see come to an end.
“The Hardemans have leased that school section since the early ’40s,” she said. “I guess I just feel that once the land is sold that unless that money is put safe somewhere ... otherwise, once the land is gone, it’s gone.”
Selling state lands often crops up in conversation.
“As time goes on, it just comes up,” she said. “Someone says, ‘We need to do something with that state land, we need to have more money,’ but nobody comes up with a good decision.”
Leasing the land, she said, helps keep ranching alive, especially in Teton County.
“We sublease it so it is still in the ranching business,” Hardeman said. “That helps them out and keeps ranching continuing in Teton County. There’s not a lot of opportunities anymore with other developments. They’re not always open to having cows as their neighbors.”
She isn’t in favor of developing state land or someone else taking over the lease but also said buying the property likely isn’t feasible given its value.
“When the property is valued at 40 million dollars, I don’t know that a rancher would be able to justify paying that amount of money for that,” Hardeman said.
Jim Magagna, president of the Wyoming Stock Growers Association and former director of the OSLI, thinks there would be “a lot of cases where the landowner would welcome” the ability to purchase land within their existing ranching operation but not on a sprawling basis.
“I think the state should always be open to doing land exchanges and land sales in some instances, on a case-by-case basis where they can see an opportunity to do something more significant with the land,” Magagna said. “Our view is that we generally are bothered by proposals for wholesale sale or exchanges for state land. We think it needs to be done on a parcel-by-parcel basis.”
And while ranching shouldn’t be prefered over education, Magagna said, he’d like to see it given consideration, too. While the parcels’ scattered nature usually means they don’t make up the bulk of a ranching operation, they’re still important.
“If we were going to sell a parcel of school trust land, we need to at least be able to show that we’ve looked at what impact there would be to, say, a ranching operation that would be on that land,” he said. “It shouldn’t be a determining factor over what’s best for the income of the schools but it should be part of the overall equation.”
State: We take a long-term look
Gov. Mark Gordon wants to generate more revenue from school trust land, but not by selling it.
“I’m generally not encouraged by that kind of notion,” he said.
But through public meetings and conversations, Gordon said, some change may be afoot.
“I think we do have to figure out ways we could get a little more return on them, but they are public trust lands and important in our inventory,” he said.
Like Magagna, Jason Crowder at OSLI said the state prefers to review parcels on an individual basis. But he said he had heard similar ideas to Mead’s in the past.
“I think that idea has been floated around quite often,” he said. “We want to review each one of those to make sure if we do sell it, it’s something that we should sell and it’s in the best interest of the beneficiary. On a global scope, it’s not something we are pursuing, but we look at each situation independently.”
The state land board has received guidance from the Legislature in the past to maintain ownership within 10,000 acres of a 1999 baseline amount of roughly 3.1 million acres.
“We did sell quite a bit of land to generate those funds early on, but then we came to the conclusion that owning the land might be more beneficial than selling it,” Crowder said. “We’re not unique in that. A lot of other states retained quite a bit.”
He pointed to Nebraska and South Dakota as states that sold a lot of their land and now manage the investment return but are “kind of at the whim of the stock market fluctuation.”
“We’ve been around for 128 years generating money for the school children, and we’d like to continue to do that,” Crowder said. “If you put all of your eggs in one basket, we think that is really risky.”
Deficit in K-12 education funding or not, Crowder said that approach doesn’t change. The OSLI, he said, is exploring additional uses outside the normal grazing, oil, gas and coal production — like recreational leases and an uptick in renewable energy leases for things like wind energy production — to generate more money.
“When we manage lands, we don’t really consider who the beneficiary is,” he said. “If the opportunity comes up for use on those lands, that specific beneficiary just gets that benefit. We don’t steer people towards school sections or any other sections.”
Their goal? “To have as many compatible uses that can stand on top of each other on a single parcel as possible.”
“I think that we operate all the time as if schools are in a deficit,” Crowder said. “We’re always trying to optimize and maximize revenues from these lands and always do more … I think that’s what we do every day.”