A Look at State Trust Lands and Revenue

Written by Cynthia Cloud

The State of Wyoming was granted certain lands by the federal government when it was admitted into the Union in 1890. These lands now total 3.5 million surface acres and 3.9 million subsurface acres and are held in trust for the benefit of several beneficiaries, the largest of which is the K-12 school system. They are managed under the authority of the Wyoming Board of Land Commissioners for the benefit and support of the state’s public schools, among other designated beneficiaries.

Finding ways to optimize the value of these state trust lands in perpetuity is an important duty as a member of the Board of Land Commissioners. Last year, Wyoming’s state trust lands generated $256,792,255 in total revenue.

Wyoming is fortunate to have conservative leadership since statehood to preserve the permanent trust fund. We have successfully managed these assets for 127 years.  As of May 2017, Wyoming’s Permanent Land Fund has a market value of $4.1 billion, the earnings from which assist in funding K-12 education in our state. 

As early as 1911, many states began a downward spiral of mismanagement of their trust lands, which spurred a study conducted by Dr. Fletcher Harper Swift of Columbia University. This analysis determined that two-thirds of the lands and funds were “squandered or lost.” A closer look at the results from 1911 show that the trustees made some mistakes in management of their assets. These mistakes included the diversion of funds for purposes other than school funding, a lack of responsibility or authority, carelessness or incompetence in management and inadequate oversight by public officials, overwhelmed with other responsibilities.

With the decline of our mineral and severance tax revenues, management is even more important today. Management of these lands and the investment of the revenue generated to support our public institutions and education is vital to the success of our children.

In 1896, Wyoming’s State Auditor William Owen issued the Annual Report showing the balance in the common school trust fund was $29,335. In his report, Auditor Owen stated, “The revenue thus obtained now amounts to no inconsiderable sum and should be utilized at the earliest possible time.”

Auditor Owen continued, “It is therefore recommended that suitable legislation be enacted to make these various funds available at once.”

In 1916, 20 years later, we had a balance of over $1 million.  These funds are still available and are being used today.    

There is a strong debate currently about the state’s decreased revenues and the education funding gap. Historically, children attended school for fewer years and didn’t demand the same level of investment we experience today. Our education system has changed dramatically since 1890.

Since then, the modern education system has been expanded to include all grades from kindergarten through 12th grade, with more subjects and areas of interest being offered. This adds pressure to the ability to provide adequate funding without supplementing. Funds expected to be used for Wyoming’s education system are projected to be approximately $400 million below projections.

A key to good stewardship is protecting these lands from misuse and abuse to optimize the monetary returns to the state’s trust beneficiaries. During my tenure as State Auditor on the Board of Land Commissioners, I have witnessed instances of a lack of diligent care on behalf of some citizens utilizing these lands in areas around the state. I believe this lack of care is a direct result of a lack of awareness and education as to the importance of these lands to our citizens.

For example, on a parcel of state trust land in Natrona County, art was intentionally shot to pieces and left, along with other junk debris. In Big Horn County, we spent over $3 million cleaning up a dumping ground. In Campbell County, state trust land enrolled in a Game and Fish Walk-In Area had animal carcasses, gun casings, computers and other junk debris repeatedly dumped and shot at. A safety concern was also realized when a high-caliber round shot from this property entered a shop with the owner inside. In Laramie County, a fire was started due to the use of explosive targets on state trust land after the parcel had been restricted to no vehicular use from junk debris being dumped. These are a few of the many examples of incidents that have occurred on your state trust lands.

Incidents like these can reduce the value of a parcel and its revenue generating potential. In addition, the increase in expenditures and staff time to clean up the property costs the state several thousand dollars each year.

My tenure on the Board has demonstrated that our younger generation has to take the torch and begin taking care of these trust lands. Educating our youth on the purpose and value of the lands is important to conserve and protect these lands for our future.