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Common Currency: Public benefit key in tax forfeited land use

Alan Zemek

"The land belongs to the people. We should give them more cabins."

So was quoted a county commissioner in last week's article in the Enterprise reporting the discussion of hunting leases on public lands at a recent county commission board meeting. The question I have is where do I sign up for my free cabin?

In all fairness to the commissioner, I am sure in the course of a casual conversation he was not advocating redistributive economic policy to take county tax revenues collected from hard working private cabin owners so the government could give away more cabins to the "people."

But then again, even after being told that local units of government - the townships - were opposed to more leases on tax forfeited land, the same commissioner urged that "we should do everything" to see than even more leases are issued. How often have you seen that before - a larger and more powerful unit of government riding over the local concerns of a smaller unit of government?

Again, I am sure the commissioner's intention was to advocate for a reasonable public policy choice towards greater utilization of tax forfeit land. But here's an idea: If you want greater utilization of tax forfeit public land then sell it and get it back on the tax rolls.

Again, in all fairness, Hubbard County's tax forfeit lands are truly a fantastic resource that is held in the public trust. Policy decisions regarding management and utilization of the county's forests and wetlands rightfully belongs to the elected county commissioners, accountable to the public on whose behalf policy choices are made.

And it is clear there was some thoughtful discussion of the issues. 51 proprietary lease-holders currently have something akin to quasi private property rights that allows the "Elite 51" 10-year leases to essentially exclude all others from public land for their own private use and enjoyment. As another commissioner is quoted, "The hunting leases have spawned "a legion of RVs ....Bringing large parties of hunters with them." The county doesn't know who is there and doesn't get revenue from use of the lands."

Another issue is "lease-creep." A 10-year proprietary hunting lease provides an incentive for the lease holder to add fences, gates, build access roads, add permanent structures, and otherwise encroach upon the public far beyond their limited leasehold rights, essentially allowing them to carve out private tax-free estates in the public forests.

Here is a public policy and environmental economics case study problem if I ever saw one.

There is clearly an economic case for encouraging the highest sustainable utilization of tax-forfeited land to produce revenue for Hubbard County. Wide public access for hunting and other recreational uses brings visitors to the area and helps support local businesses.

So the commissioners are on the right track, but the ultimate policy choice should be based on a sound business model that creates the right pricing mechanism to account for the benefits and costs of the proprietary hunting lease program, and the demands created for public services. (For example, private landowners are charged a fee for a fire call. Who pays the fee if a fire call is made from a hunting camp on public land?)

Sound economic policy is based first on price discovery and market transparency. The same commissioner advocating for more leases on public land reportedly received unhappy phone calls from all 51 current proprietary lease holders regarding the possible termination of their leases. That indicates they know they are getting a really good deal.

One way to find out what a hunting lease is really worth would be a bidding system for pricing hunting leases on public land. To avoid the problem of "lease-creep" the lease term could be limited to one year. With 140,000 acres to mange, there would be plenty of alternative sites to bid for. This system could also include a lottery for a number of low cost or no cost leases to create wider access in the public interest.

The policy choice is for the commissioners to make. But let's understand the economics of the hunting lease market and get the most out of it for the public benefit.

Alan J. Zemek is a Park Rapids area developer and author of "Generation Busted: How America Went Broke in the Age of Prosperity." You can follow his blog, or comment on this article on his website, www.genera