Now their complaints are being heard in a lawsuit recently filed by the Arizona Center for Law in the Public Interest in Maricopa County Superior Court. The Center represents the parents of children enrolled in Arizona's public elementary schools--the beneficiaries of the trust.
The suit asks for competitive bidding from ranchers who want to graze cattle on school trust lands.
If the suit is successful, Center Director Timothy Hogan projects
three to four times more cash may be collected for Arizona public
schools. The trust fund netted a mere $2 million for the year
ending June 30.
Arizona was admitted to the Union in 1912 with the provision that public lands were to remain in trust for public schools, and that proceeds from lease or sale of these lands belonged to the Arizona School Fund. The Enabling Act further stipulated the land was to be leased or sold only to the highest bidder at an advertised public auction.
However, the Arizona Constitution, state law and land department rules don't require advertising for school trust land leases of less than 10 years--a violation of the Enabling Act, the suit contends. In addition, the state also gives renewal preference to existing land lessees--a practice that erodes the guts of the Enabling Act, the Center argues.
State Land Commissioner M. Jean Hassell, a defendant in the suit, doesn't deny such practices exist.
Hassell says because state lands are interspersed with private and federal lands, many ranchers must lease from the state, private owners and the federal government to obtain a workable ranching operation. Thus, he says, it makes economic sense to give preference to the lessee when a contract is up. "You need large acreages to have an operable unit," he says.
"Open bidding is appropriate where it fits," Hassell says. "It's inappropriate here." In some states, 90 cattle can sit on one square mile, he notes. "The problem is (Arizona) has the lowest productive land in the country. One square mile might (feed) seven cattle."
The department offers land at a lower fee than private owners--currently $1.53 per animal unit month (a.u.m.). In Arizona, an animal unit month is the amount of forage required to feed an adult cow or bull, five sheep, one horse or five goats for one month. The average private lease rates in this region are about $5.50 per animal unit.
Hassell says if the Center's suit succeeds, many ranches will go belly up.
But Hogan says grazing fees have increased only by some five cents per a.u.m. over the last five years. With 1,426 livestock grazing leases out on more than eight million acres of school land, profits going to the school trust are about 25 cents an acre, he says.
Since lessees often rent from the state and then sublease, making a profit on the land, Hogan argues, the land department can obviously collect higher fees. "Lessees are taking advantage of the system. If there's going to be a profit, it should be going to the public schools."
Hassell couldn't quote an exact number for subleases in the state, but said it was probably less than 10 percent of the total leases.
Hassell says public bidding won't be needed for school trust lands because the Grazing Land Evaluation Commission, appointed by Gov. J. Fife Symington III, will soon be reassessing rates. Hassell says he's hoping the Commission will place equitable values on the land.
But critics charge the Commission is stacked with rancher-types. Hogan says the fees might be boosted, but appraisal is one of two parts in the Enabling Act. Public bidding, which the Center is suing to enforce, is the second part. The appraised value should establish the minimum bid, he says.
Center officials have plenty of experience attacking what they see as inequities in education as well as public lands issues. Last summer they convinced the Arizona Supreme Court to rule the school finance system was in violation of the state Constitution for not funding a uniform public school system--a situation which allowed some wealthy districts to have pools and tennis courts, while indigent districts had none.
In the Center's 1987 challenge to the state's minerals leasing practice, the Arizona Supreme Court gave legislators permission to regulate mineral leases, as long as there was substantial conformity to the Enabling Act restrictions. The 1951 Enabling Act Amendment was not intended by Congress to free the state from the Act's objectives, according to the Court. Hogan contends the same analysis would apply to grazing and agricultural fees.
More than a decade ago, the Center represented the Arizona Education Association in a lawsuit alleging the state land department was not asking fair market value in grazing fees. In an agreement reached between the AEA and the Arizona Cattle Growers Association, it was decided litigation wouldn't be pursued as long as fair market value was sought in grazing fees.
But state land department leases are nowhere near market value today. "Somehow free markets are considered good enough for certain things but not good enough when it comes to corporate subsidies like this," says Hogan.
When it comes to enforcing the Enabling Act, Hogan contends, it's irrelevant whether ranchers go out of business. "If the land has value, it will get bid on," he says.
"The bottom line is (the state land department) is producing so little money off this, it's not as if they can lose any more. They leased the land for so little that even if they're right (about ranchers not being able to afford the higher rate), it's not going to be a big loss. But if we're right, it's going to be a big gain."
