Ted Simons: Back when Arizona became a state, Congress gave us more than 10 million acres of land to hold in trust for public schools. Today more than 9 million acres remain. These state trust lands are leased and sold primarily to benefit education. The process is managed by the state land commissioners. Former Phoenix City Councilwoman Maria Baier was appointed to the post in June, and we'll hear from her in a moment. First, here's what her predecessor had to say about Baier and her new job.
Mark Winkleman: Let me just say I think she is a terrific choice. When I took the job I needed all the help I could get. Maria's got a wealth of background with the trust lands and she's been involved in the trust lands reform effort. She doesn't need that kind of help. I wish her a lot of luck, the times are very trying and the budget pressures are as bad as it's ever been. The staff is significantly lower than it had been, but yet the tasks are much the same. How do you do as much as you can with less? It's not just the land department, it's everywhere. But you've got so much money, and it goes for education, and that's a pretty good cause.
Ted Simons: Joining me to talk about her new job with the state land department is State Land Commissioner Maria Baier. Good to have you in the program. Thanks for joining us.
Maria Baier: Thank you, Ted.
Ted Simons: Any surprises so far? Your predecessor talked a little bit about some advice or what he saw and what you're going to see. What are you seeing?
Maria Baier: I am seeing an economy that has touched the land department as it has touched other landowners. We're staying very busy at the land department with other kind of sales such as open space sales and rights of way and mineral leases and those types of things.
Ted Simons: Tell us about your background. This seems to be something that you were made for.
Maria Baier: First of all, I enjoy it very much and it's a great privilege to serve in this capacity. I did recently serve on the City Council, that gives me the perspective of cities. I have an open space background and I served on the governor's staff as a policy advisor in growth and natural resources. I represented the industry for a period of time so I know how the business community thinks. I do have some background that helps me understand the job.
Ted Simons: Let's understand the job and the department. Basically selling and leasing public lands, correct? Getting the best deal you can.
Maria Baier: I would say yes, with one minor suggestion that we call them trust lands. They aren't public lands like parklands or BLM lands or Forest Service lands. They were granted to the state of Arizona by the federal government with the express condition that they be sold and leased to generate revenue for the beneficiaries, which are 13 public institutions. Almost all of the land, 87%, is held in trust to benefit public schools. They are not really public lands. You have to have a permit to use the land or have a lease or have bought the land to be on it legally.
Ted Simons: And your job is to find the best use for the land, the best time to sell or lease, and get the best price.
Maria Baier: Exactly. That's it in a nutshell. We're supposed to be making money. A lot has to do with the land on the market, the economy, the timing of the sale.
Ted Simons: So much of the land is leased, correct? Especially rural lands. Talk about that and how ranchers and such can be stewards of the land, as well.
Maria Baier: We're very fortunate, 85% of our land in the inventory of the 9.3 million acres is leased for grazing purposes. And far and away, the folks who are our lessees on those lands take very good care. We're grateful for their efforts and they bring in revenue to the trust in areas where there otherwise wouldn't be any revenue for the trust beneficiaries.
Ted Simons: Indeed. But the bigger area would be in commercial leasing. How that is going?
Maria Baier: Well, the big dollar sales are not occurring very much right now. Because we are a perpetual trust, we last forever. We aren't in any hurry to sell land in a slow market. We need to wait until the economy recovers to put land up for auction. The exception is those folks who come to us with deals where the land department may receive a share of the proceeds from the future use or future sales of that land. So we are allowed to participate in future profits. The only lands that we would think about selling or leasing that are high-dollar urban lands, are those where there's some upside on the end of the transaction.
Ted Simons: Gotcha. How best do you balance the competing interests? You've got all sorts of folks wanting all sorts of things. How do you manage that?
Maria Baier: The mission of the trust is so clear that we have to sell for true value, it's called. It's been interpreted as highest and best. We just need to look primarily at the amount of revenue that we can generate. That's first and foremost. But we do look at the long-term benefit to the trust. So if we know that holding on to a piece of land because we're going to get future zoning or something on it, we can defend not moving a piece of land right away. Or if there's going to be a road coming in in the near future that's going add value, we can wait and sell it at that time. The other competing interest is the conservation community. We do work through issues with that community, as well.
Ted Simons: How does re-classifying for conservation purposes work? What are you looking at there?
Maria Baier: You know, there's a very well-defined definition of the word conservation in statute right now. It really has to do with the quality of the lands, the terrain, what the fauna and flora are on the land. All kinds of things that go into making a property worth conserving. But it's a very well-defined word, conservation. There is a proposal right now that the governor, my boss, Governor Brewer, is advancing to reform how state trust lands are managed to allow greater conservation of some of these lands across the state that really are signature landscapes and deserving of protection.
Ted Simons: I know the Governor and legislature have been cutting things right and left as far as budgets are concerned. Your department is no different until the funding mechanisms change. Let's take a look at that right now.
Mark Winkleman: The department has chronically been underfunded. There needs to be a change. This year is a landmark situation because what I've argued for the last six and a half years is we're legally a trust. Every trust I've ever dealt with funds its operations out of what it makes. There isn't any reason the land department should be any different. You've seen the last several years we've produced sales of almost $2 billion a huge amount of money. We certainly have enough money to pay our own way. The annual budget has been going down, but it's been as high as maybe $17 million and down to $13 million now. We easily confirm that from the proceeds we generate each year. The pitch this year is legislature, take us off the general fund. We can help you with your problem of balancing the budget. Let us use some of the money we generate to fund ourselves.
Ted Simons: It sounds like a good idea, you get your money from what you've developed and generated. It sounds like the legislature has now agreed as a self-funding mechanism. But that is legal?
Maria Baier: The legislative council, the body that advises the legislature in terms of legality and laws, has opined that it is. And that is how the statute that authorized our self-funding this year was passed. It was considered and analyze and they determined that it was legal. We do get to take a small share of the proceeds that are generated through sales of state trust lands to fund the department. As Mark said, it is consistent with the way that most trusts are managed.
Ted Simons: Last question: Quickly, compare and contrast Phoenix City Council and what you're doing right now.
Maria Baier: The main thing is with the City Council you really deal one on one with citizens. And it's very street-level service delivery oriented, day to day. My backyard kind of stuff. The land department, big parcels, big deals, mostly business interests that you deal with, both enormously fulfilling opportunities and ones for which I've been grateful.
Ted Simons: Very good. Thanks so much for joining us, a pleasure to have it you in the program.
Maria Baier: Thank you, I've enjoyed it.