Swiss Christmas gift comes with a price tag

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by Terry Anderson

It would appear that Santa arrived early this year in the form of a Swiss billionaire who donated $35 million to the Nature Conservancy and the Trust for Public Land. The donation was used to help the organizations purchase 310,000 acres in Montana from Plum Creek Timber.

The kicker is that the land will be turned over to the federal government. This may seem like a gift from Santa, but beware of the warning label: this gift requires significant maintenance costs.

Unlike most assets, which are expected to earn returns over the long run, turning this land over to the federal government will generate costs, not revenues. The Forest Service - the agency poised to receive the lands - loses an average of 77 cents for every dollar it spends on land management. And based on the average amount it costs the Forest Service to administer an acre of land, the Plum Creek parcels will cost the government approximately $6 million per year. That means that in six years, taxpayers will have spent more on management than the Swiss Santa donated in the first place!

This is hardly the kind of gift that a government so far in debt needs.

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Terry Anderson is the William A. Dunn Distinguished Senior Fellow and former President and Executive Director of PERC as well as the John and Jean De Nault Senior Fellow at the Hoover Institution, Stanford University. He believes that market approaches can be both economically sound and environmentally sensitive. His research helped launch the...
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