Agriculture and OSLI Partner for Wyoming Education
It seems every time we open the paper or watch the news, there is a story about the downturn in the energy markets and the resulting budget troubles the downturn causes for the state of Wyoming. Of particular concern in these discussions is the predicted shortfalls in future education funding. The conversations about how to resolve this significant problem are already underway, and the state has smart people working on the problem from multiple angles. The resolution of the problem is likely going to take numerous ideas and contributions from many different sources.
As I read these articles, I can’t help but reflect on the mission of my office, the nature of the lands that we manage and the components we and our industry partners provide in the solution of this problem.
In particular, among other things, my office is responsible for managing the lands that were granted to the state when we became a state. At that time, various land grants were made to the state from the federal government. Each land grant was made for a particular purpose and to support a particular institution or beneficiary organization, for example, the penitentiary or the state hospital.
The bulk of the land granted to the state was “for the support of the common schools,” or generally, K-12 education. Eighty-six percent of the land managed by my office is managed for the support of the common schools. These lands are held in trust and managed for the benefit of education in the state. The Board of Land Commissioners is the trustee of these lands. My office, the Office of State Lands and Investments (OSLI), is the administrative arm of the Board of Land Commissioners doing the day-to-day work of managing the state trust lands.
Given the purpose for which these lands were granted to the state, the lands must be managed to generate and optimize revenue for current and future generations. The revenue generated from school trust land assets is placed into either the common school permanent land fund or the common school permanent land income fund. Generally speaking, income generated from depletable resources, like land sales or mineral production, is placed in the permanent land fund. Those funds are then invested to generate income which the legislature can appropriate for education. Income generated from non-depletable resources, like grazing and agriculture leasing or other surface uses, is placed in the permanent income fund and is immediately available for the legislature to appropriate for education.
In 2017, my office generated approximately $257 million in revenue from the state trust lands, and $235 million of that went to the common school funds. Of that, surface uses contributed $44 million in revenue. Unlike revenue from depleting sources, that revenue went to the permanent land income fund and was immediately available for the legislature to appropriate for education funding.
Although the revenue generated from the surface uses is a smaller percentage of the overall revenue generated for the common school accounts, it is a tremendously important piece. In particular, grazing and agricultural is the most prevalent use of state trust land. Ninety percent of the land that my office manages is under a grazing and agricultural lease. The revenue generated by grazing and agricultural leasing is a consistent and dependable source of revenue that we rely on to help fund education. Unlike revenue from depletable resources, the revenue generated from grazing and agricultural leasing is available every year for appropriation.
In addition to the revenue contributed by our grazing and agriculture lessees, our lessees also provide significant intangible benefits to the state trust lands. Our office is charged with managing 3.5 million surface acres scattered across the state. We cannot feasibly visit or manage all of those acres on a day-to-day basis, and we therefore rely on our lessees to help us manage the land and be our eyes and ears on the ground. This important function guarantees that the state trust lands will be productive for many years to provide revenue for future generations of school children.
In that regard, our lessees are an important component in the education funding picture, providing a stable and reliable source of income that can be counted on as the state tries to resolve the education funding problem. As we all strive to consider new ideas and explore new sources of revenue, it is comforting to me to have the consistent and reliable agriculture industry as a partner, not just for the revenue dollars you contribute but also for the reminder that Wyoming people are tough, resilient and resourceful and with that sort of character, we will figure out how to weather this budget storm.