Utah Gets Ready To Do Without the Feds

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.

Read the rest of the very interesting interview here.
And don’t miss Jesse
Walker’s take on how immigration from California has made Idaho
more conservative.

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.