Great Lakes Article:

Schools would lose funds under BWCAW land swap
By Marshall Helmberger
The Timberjay
11/20/03

For the past several legislative sessions, debate over how best to deal with 93,000 acres of state school trust land in the Boundary Waters Canoe Area has focused on a potent political symbol-school kids.
Local legislators have complained bitterly that the state is no longer able to meet its obligations to derive revenue from those lands for the state’s schools due to the federal wilderness restrictions, which prevent logging and other activity on all lands in the Boundary Waters. That situation, according to some legislators, is shortchanging the state’s students.

But the leading proposal to address the issue would, in fact, lead to cuts in funding to many school districts in northeastern Minnesota. That proposal, which is backed by northeastern Minnesota legislators, the attorney general, and the Pawlenty administration, calls for exchanging the state lands for as much as 300,000 acres of federal land outside the wilderness, in the Superior National Forest.

"I assume we’ll be back with the proposal again this next session," said State Rep. Tom Rukavina, who has been the primary backer of the exchange idea.

Rukavina and other supporters say the revenue the state could derive from logging and other activities on the 300,000 acres they hope to acquire would increase the size of the state’s Permanent School Trust, and ultimately benefit schools.

But that argument isn’t without its problems. For one thing, proceeds from the school trust don’t go directly to schools. The Legislature sets the state’s appropriation to schools, and interest from the school trust, which amounts to between $20 and $30 million a year, helps to offset the cost of school funding to the state’s general fund, rather than adding to the overall appropriation. That means any benefit to schools is indirect at best.

The argument finds even tougher going, however, when the loss of federal funding is added to the equation. Under longstanding federal statutes, federal land managers, such as the U.S. Forest Service, are required to pay 25 percent of their receipts from the sale of timber or other resources to schools and counties in which those federal lands exist. While the dollars paid out by the Forest Service under this provision have declined in the past few years, along with harvest levels, they still provide at least a modest boost to area schools. The Forest Service, for example, paid the St. Louis County School District about $113,000 last year. While some school districts received considerably less-Ely received $10,503-other districts fared better. The Lake Superior School District, based in Two Harbors, received $163,000 last year. The Cook County district came in about the same as the St. Louis County district, averaging about $109,000 a year the past two years.

Were the state successful in engineering a land exchange of the size envisioned by local legislators, it would reduce federal holdings outside the wilderness by nearly a third, an outcome that could be expected to reduce 25 percent funding by a similar amount.

The Cook County School Board, concerned about the financial impact of the exchange, approved a letter of support, during last year’s legislative session, for a proposal that would have required the DNR to conduct a cost-benefit analysis of the proposal to exchange the land, as well as analyze two alternative proposals, one to sell the 93,000 acres to the federal government, and the other to establish a recreational fee for use of the state lands in the BWCAW.

Critics of the exchange have argued that an outright sale of the land would generate much more revenue to the school trust than an an exchange ever would.

And since a sale of the land would not reduce federal ownership outside the BWCAW, it would mean no reduction in federal funding to area schools.

Under the exchange proposal, the loss of federal 25 percent funds would likely fall hardest on the St. Louis County School District-because the DNR has targeted lands on the western side of the forest for possible exchange. Since the 25 percent formula is based on the amount of federal ownership in each county and school district, the loss of much of the existing federal ownership in St. Louis County (most of which resides in the St. Louis County school district) would drastically reduce federal funding for the county school district.

But it is unlikely the loss would be distributed equally-the DNR has targeted federal lands on the west end of the national forest, mostly in St. Louis County-which means the St. Louis County district stands to lose the majority of its 25 percent funding.

Rukavina acknowledged that school districts stand to lose federal funds under his exchange plan. "But I think on the other side of that is how many more kids do you keep in your school districts?" He argues that increased logging on newly-acquired state lands could help boost job growth in the region, and keep more families with children in the region. "Every kid we can keep in the district brings in $6,000 in state aid," he said.

But others question whether the entire issue isn’t more about politics, than policy. "I think everybody has come to the realization that neither a land exchange or a buyout isn’t feasible at this time," said Janet Green, a Duluth area activist who has closely followed the land exchange issue. According to Green, the state had the opportunity to begin a federal buyout of the state lands in the mid-1990s - a move supported by the state’s entire congressional delegation - but the idea was ultimately blocked by a handful of northern Minnesota legislators. Green said the federal fund that would have paid for the buyout is now all but empty.

Green said the only realistic alternative at this point is to consider a recreational fee on canoeists and others who wish to camp on the state lands in the wilderness. "If you want to benefit schools, you could do that," said Green. "Otherwise, it’s silly for legislators to keep harping away on this issue, unless they’re simply using it as a screen for other issues," she said.