Over 1,900 local governments received $553 million from the Department of Interior this year to compensate them for lost tax revenue for federal lands that cannot be developed in their territory. These payments are the consequence of more than 640 million acres of land, which amounts to 28 percent of the U.S. territory owned by the federal government.
The Federal Government Is Hoarding Huge Potential Prosperity
The costs of federal ownership are not only payments to local governments but also environmental damage due to mismanagement and deferred maintenance, as well as the lost economic activity that cannot occur in 28 percent of the country.
Of all federal land, 27.4 million acres are National Parks, while approximately 600 million acres are managed by the Bureau of Land Management, the National Forest Service, the Fish and Wildlife Service, and the National Park Service. These government agencies allow grazing and other economic activities on federal lands in exchange for fees. However, since fees are not enough for the expenses of these agencies, the federal government spends several billion dollars per year to cover the difference.
Additionally, the federal government owns more than three trillion barrels of oil and 450 trillion cubic meters of natural gas that are currently not available for leasing or development.
The Bureau of Economic Analysis concluded that the value of all federal lands was $1.8 trillion in 2009. However, this estimate is outdated and was calculated while property values were declining.
If Congress allowed the sale of all federal lands, the revenues could fund a sizable portion of the national debt.