New Funding Alternatives for State Recreation Lands and Wilderness Areas
February 2003
The Washington State Department of Natural Resources (DNR) manages a sprawling three million-acre system of public lands and protected wilderness, hosting more than nine million visits each year. As the state's population grows, so does the use of state parks and wilderness. Management and maintenance of these areas is largely funded by legislative appropriations, while licenses, user fees and other income providing a small portion of the annual budget.
Faced with a $2.4 billion general fund budget deficit, it is likely state legislators will reduce funding levels for DNR recreation lands. In response, Commissioner of Public Lands Doug Sutherland is proposing a new timberland and real estate purchase program designed to fund the maintenance and management needs of our system of public lands. The program, called the Legacy Trust for Recreation and Conservation, would issue bonds, collect grants, and use legislative appropriations to purchase productive timberland and commercial real estate. The newly purchased land would be held in trust, much like existing state education trust land, and revenue from timber harvest and other commercial activity would be dedicated to preserving and maintaining state recreation lands.
It is encouraging that Commissioner Sutherland is pursuing creative ways to make state government run more like private industry, but it is also important to consider a number of other reforms that may help reduce the current cost of managing state lands, and improve the performance of land the state already owns. By changing the way public lands are managed, and searching out new investment tools that can support state government services, the Department of Natural Resources can reduce existing management costs, improve investment performance and ensure access to public lands without raising taxes.
Using capital assets to fund state services should be only a limited part of DNR's revenue strategy. Most public investment boards require a much more diversified investment portfolio, helping to protect state investment funds against reliance on narrow market segments like timber and real estate. Pension and endowment trusts in other states generally allow only one percent of their total portfolios to be invested in timberlands and less than ten percent of all investment in real estate and timberland combined.
The state should consider three primary alternatives. First, DNR should consider selling some of its existing property to the private sector. State land ownership has grown over the past decade. Maintenance backlogs are partially a result of increasing public land ownership and the expanding services offered in different locations across the state. These services are costly, and can often be performed more efficiently by the private sector. Revenue from the sale of state lands could be transferred into a dedicated Natural Resources account managed by the State Investment Board, which provides stable, diversified management alternatives for more than $40 billion in existing state assets.
A second alternative is implementation of access fees for parks and wilderness. Families and individuals in the highest income brackets make up the lions share of park and wilderness users. Legitimate access barriers for low-income families can be addressed through discount programs and other alternatives, but in general, the people who use the facilities on public land should pay more for their upkeep.
A third alternative is for the Department to competitively contracting for forest management services. Many highly-qualified forest management firms care for hundreds of thousands of acres of private forestland throughout Washington, often at much lower costs than those charged by DNR personnel. State timber harvest over the past 15 years has declined considerably, dropping from over one billion board feet in 1985 to just over 500 million board feet in 2000. Some industry analysts estimate state trust accounts under-perform by as much as $350 to $500 million each year.
The growing needs of our state's popular parks and wilderness areas cannot be ignored. While the cost of management is certainly increasing, it is important to remove underlying inefficiency before asking taxpayers to pay for another government land purchase program.