Cow Punchers

Ranching takes a blow in the courts, an uppercut to the bottom line and a jab in the marketplace

Last year the State Land Department collected $2.6 million for grazing on 8.45 million acres of state land, about 31 cents per acre--though that's not the way the department charges. Instead, ranchers are billed $2.09 per "animal unit month," a formula that takes into account the price of beef and the value of forage on the allotment. Arizona has one of the lowest grazing rates in the West, but in many parts of the state, the grass is so sparse that it can't sustain very many animals anyway.

The department also boasts that in fiscal year 1996, it paid out $63.5 million to the state's schools. But that's chump change given the actual cost of running schools across the state. The Phoenix Union High School District's budget for the 1996-97 school year was nearly $122 million, and the Paradise Valley Unified School District's budget for the same period was more than $132 million, for instance.

Last April, Judge Dann denied a motion for summary judgment from Hogan, saying that the plaintiffs had failed to demonstrate actual damages or loss to the schools trust.

But the very next day, the auditor general released his report.
By state law, every state department must undergo "sunset review" every 10 years to make sure that the state government should continue that department, and, by coincidence, 1997 was the year the State Land Department came up for review. The report concluded that the land department was worth keeping, but that it could operate a bit more intelligently.

The audit suggested the department could put grazing allotments up for bid when they expired, for example, and provide public notification of lease expiration so that other interested ranchers could bid on a property. And furthermore, the state could collect some revenues from the 105 allotments that had been subleased to other ranchers by the leaseholders; currently, ranchers are not required to pay surcharges on fees they collect for subleases.

The sunset audit also suggested that the State Land Department was either being royally hosed by developers or was willingly selling public trust land on the cheap. The report detailed that the department was selling large chunks of north Phoenix and north Scottsdale to developers for as little as $12,000 to $14,000 an acre with the understanding that the developers would then have to put $30,000 or so per acre into each lot for infrastructure improvements. The developers, however, were then selling the lots for $97,000 to $226,000 per acre.

Hogan filed papers asking the judge to reconsider his decision, and, on July 24, the judge changed his mind. Dann decided that the plaintiffs did not have to prove actual damages so long as they could show a "reasonable likelihood" of a breach of trust to obtain relief.

The department's turning down only one renewal in 50 years amounted to a "de facto system of long term leases," he wrote, and he ordered the two sides to reach agreement on a timetable for the department's compliance with the law.

The ranching-industry spin started immediately.
A packet of literature from the Arizona Cattle Growers' Association that was distributed at the group's annual convention worried that loss of grazing allotments in local communities would amount to a loss of revenues for the state, as well as lead to unemployment, vandalism, fires, loss of wildlife and "family upheaval."

In fact, the literature warned, if ranchers lose grazing allotments, the "increased stress may lead to divorce, alcoholism, physical abuse, loss of self esteem and other social problems which come from loss of one's self of security and livelihood."

The Cattle Growers' Association also provided a "sample press release to be used by school board members or parents," a document with fill-in-the-blank, your-name-here attributions on quotes. One read: "'I cannot compete with foreign billionaires whose oil money can now be used to displace my family's ranch operation,' said ________, a rancher from _______."

It climaxed with this paragraph: "The uncertainty and turmoil which will be created by this ruling cannot be overstated. Arizona will become the wild, wild west once again as chinese businessman, indian tribes and wealthy oil interests out bid Arizona's ranch families on State Lands. 'People who care about Arizona's children and the School Trust lands must call for a reversal of this ruling,' said _______, a parent of children in the _______ school district." [sic]

On September 17, the Natural Resources Committees of the state House and Senate held a hearing on the auditor general's findings on the State Land Department. The legislative reaction to the audit could have been predicted by the tone of a video that began the ceremonies, a rosy picture of how more and more environmentalists were finally realizing how beneficial grazing is for the environment.

State Senator Gus Arzberger of Willcox drawled into his microphone at the head table in the hearing room, "I don't think there was enough research done on this for the auditor general's report to be reliable."

He got a round of applause from all the folks in the room decked out in cowboy hats and boots and jeans, which constituted the majority (and stood in stark contrast to the developers with their loafers and cell phones) who had come to take its own shots at the young bureaucrat from the Auditor General's Office.

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