The Arizona Legislature has tampered with the state’s natural Heritage Fund since voters passed Proposition 200 in the 1990 election to create it. The changes include a 1995 revision that made it easier for the money to be used for ranching subsidies
Prop 200 directed that Arizona State Parks and the Arizona Game & Fish Commission would each receive up to $10 million annually from the Heritage Fund. Its declaration of policy stated that:
The people of Arizona believe it is in the best interest of the general economy and welfare of Arizona and its citizens to set aside adequate state funds on an annual basis to preserve, protect and enhance Arizona’s natural and cultural heritage, wildlife, biological diversity, scenic wonder and environment and provide new opportunities for outdoor recreation in Arizona.
It also stated that one of its primary purposes was to annually dedicate money to the fund that was “separate” from money appropriated by the legislature.
Note: The amount of money the Arizona State Lottery sends to the Heritage Fund can be less than $20 million a year if annual lottery revenues are too low.
SB 1212, 1995
According to Prop 200, the Heritage Fund money received by the Game & Fish Commission was required to be spent for specific purposes. The biggest portion, 60%, was to be spent on sensitive wildlife habitat Identification, Inventory, Protection, Acquisition, and Management (IIPAM). Another 15% was directed to overall habitat evaluation or protection. Only 5% was required to be spent for acquiring public access to public lands.
That changed in 1995 when the Legislature passed SB 1212, a strike-all bill introduced by Sen. Larry Chesley, R-Gilbert. It expanded and blurred the definitions of the fund’s allowable expenditures. SB 1212 added “maintenance” and “operation” expenses to the allowable expenses in the IIPAM and public access expenditure categories. These words might seem innocuous, but they facilitated a significant change in the fund’s original focus from protecting and acquiring endangered species habitat, towards big game management and providing subsidies to Arizona ranchers. (This was before Arizona voters passed the Voter Protection Act in 1998 to prevent the Legislature from amending voter-approved initiatives, such as Proposition 200.)
The subsequent FY 1997 Heritage Fund Annual Report from the Game & Fish Department made it clear that the agency understood the intent of SB 1212. The report showed that the agency had started to spend Heritage Funds on ranch agreements, which weren’t characterized as grants. There were two types of these agreements, habitat improvement ranch agreements and public access ranch agreements.
Furthermore, the report showed these ranch agreements were integrated into the Department’s Landowner Relations Program (LRP), which also uses Habitat Partnership (HPC) grants, along with other funds, to finance projects on ranches. In other words, SB 1212 broadened the legal definition of Heritage Fund expenditures so they could be used to increase the pot of money the LRP had available to make ranch agreements.
Another result of SB 1212 was a significant reduction in the Department’s release of public information about how the fund’s money was being spent. As per ARS § 17-298.C.7, the fund’s annual reports are only required to list and describe the grants that are issued. The money spent on ranch agreements, however, is only required to be summarized. Prior to SB 1212, the annual reports showed that most expenditures were grants. But starting with the FY 1997 report, more of the expenditures began to be in the form of project administration expenses, such as maintenance and operation expenses for ranch agreements.
The first Performance Audit of the Department’s administration of the Heritage Fund, issued in August 1996 by the state’s Office of the Auditor General, recognized this situation. It pointed out that grants made up only about 8 percent of all fund expenditures. It suggested that the Legislature should revise the fund’s reporting requirements to require the Department to “report annually on all Heritage fund program areas,” because grants and land acquisitions accounted for “less than 40% of the $10 million” the fund received each year. But the Department responded that it would prefer sticking with the existing situation, “rather than creating new and additional reporting requirements.”
The subsequent first decennial Performance Audit of the Heritage Fund in 2001 revisited this issue. It stated “the Department needs to improve its annual Heritage Fund performance report by including additional details about expenditures,” and pointed out that “no expenditure data is detailed at the project level.” It added that “it is particularly difficult to determine whether projects under IIPAM, the largest Heritage Fund program, are appropriate.” The audit even suggested convenient ways to present the information in the annual reports. But the Department’s response was, “The subject report has never been considered a report to the public. Its sole purpose has been to appraise the Legislature (pursuant to statute).”
There have been some examples of ranch agreements included in the annual reports, but they lacked important details. For instance, the FY 2007 and FY 2008 reports, which were issued during the administration of Democratic Gov. Janet Napolitano, were the only ones that showed the dollar amounts spent on individual ranch access agreements. Undoubtedly, there have been many other agreements that weren’t mentioned in any of the reports. In October 2002, for example, the Department’s LRP program manager at the time said that there were “230 or so” ranch agreements in effect.
By the time the second decennial Performance Audit of the Heritage Fund was completed in 2011, the Auditor General’s office had given up on suggesting that more information about non-grant expenditures should be included in the fund’s reports. And starting with the fund’s FY 2014 annual report, the Department began to provide even less information about the Heritage Fund money used for ranch agreements. Since then, the reports have mostly shown just the total number of agreements completed each year.
SB 1361, 2016
Ranch agreements funded with IIAPM money disappeared entirely from the Heritage Fund’s annual reports beginning with the FY 2018 report. But that doesn’t mean there weren’t any. In fact, the passage of SB 1361 in 2016, sponsored by Gail Griffin, R-Hereford, increased the allocation of IIPAM funds available to complete them.
Appropriateness of IIAPM Habitat Improvement Expenditures
The lack of information about the IIPAM money spent on habitat improvement ranch agreements makes it difficult to assess whether or not it’s being used appropriately. The first issue regarding its use is the definition of “sensitive habitat” found in ARS § 17-296.2, which describes threatened and endangered species habitat that it’s supposed to help improve. This is what the IIPAM money is legally required to be spent for, but it appears that much of it is being spent on big game habitat to benefit hunters.
For example, the fund’s FY 1997 Annual Report admits that some IIPAM money was used for Habitat Partnership Committee ranch projects that were focused on big game species. The fund’s reports also indicate that IIPAM money was spent on salt to lure elk away from private lands and livestock salting areas. And they also show it was used to help grow food for elk on private pastures, and build elk-proof fences to keep them off private property. It’s difficult to see how these projects protected and managed sensitive wildlife habitat.
Moreover, the earlier reports indicate that many IIPAM ranch agreement projects seemed more like ranching subsidies than wildlife projects. They often helped fund the construction of new livestock waters and fences. These “range improvements” were characterized as inherently good things – but that’s not the case if they facilitated more cattle on the land.
The fund’s early reports also list IIPAM habitat improvement ranch agreements for “grassland restoration” projects. They typically involve killing mesquite trees in the desert, or juniper trees in the higher country, in order to remove woody vegetation to grow more grass for forage.
Appropriateness of Public Access Expenditures
There are also questions about the use of the Heritage Fund’s public access monies which, as per ARS § 17-296.1, are required to be spent to provide “entry to publicly held lands for recreational use.” That implies the money must be spent to provide access for all recreationists, not just hunters. The Heritage Fund’s money doesn’t come from hunting-related revenue, such as hunting licenses. It comes from the state’s general fund, so the Fund’s public access agreements should benefit all Arizonans.
But most of the public access ranch agreements are focused solely on providing hunters with access to ranch lands. For instance, the fund’s FY 2014 report mentioned the completion of a public access ranch agreement with the Navajo Nation, which owns the Big Boquillas Ranch located in northern Arizona south of the Hualapai and Havasupai reservations. The “Big Bo” is composed of about 491,000 acres of private land owned by the tribe, checkerboarded with about 238,000 acres of State Trust Land, making it the largest ranch in Arizona. It’s managed by Cholla Livestock LLC, which has a grazing lease with the tribe. The agreement created a permit system administered by Cholla Livestock LLC wherein hunters would be able to pay the company a fee to access the ranch lands, and the Department would enforce ranch rules and Arizona hunting regulations.
In 2016 the agreement was renewed, but the operation of the access permit system was taken over by Big Bo LLC, a new company owned by Cholla Livestock LLC. Furthermore, the new agreement provided $55,000 a year to the tribe and its lessee “for use as a cost share” for “mutually beneficial projects to provide water for wildlife and cattle.” The money has been provided in the form of $55,000 annual HPC grants, which were increased to $100,000 annually in 2018.
This access agreement, however, only applies to licensed hunters – which excludes the vast majority of Arizona residents. Moreover, the ranch doesn’t include any public land, nor is it adjacent to any public land. It’s comprised only of tribal lands that are checkerboarded with sections of state land – and State Trust lands aren’t public land. In fact, the State Land Department requires the purchase of a recreational permit to visit them. The 2018 public access agreement completed with the Hopi Tribe similarly involves state land. These probably aren’t the only ranch agreements that didn’t provide everybody with access to truly public land.
Furthermore, most of the public access ranch agreements mentioned in the annual reports appear to be renewed every few years, so ranchers are repeatedly compensated for allowing the public to cross their land.
A Troubling Lack Of Transparency
Department staff recently confirmed to me that ranch habitat agreements are still being made with IIPAM money, even though it’s not usually documented in the agreement, and also that they have made a conscious decision to quit including specific information about them in the fund’s annual reports. In other words, basic questions about the Game & Fish Department’s administration of Heritage Fund ranch agreement expenditures that can’t be answered by any available public records.
Updates
On December 16, 2021, the Arizona Auditor General’s office released its third decennial performance audit of the Arizona Game & Fish Commission Heritage Fund. Its inadequacy was quite farcical, in that its only criticism was that the Department had spent too much money managing its wildlife properties. It failed to address the lack of transparency about the numerous Heritage Fund non-grant payments to ranchers, the appropriateness of some of the expenditures made for public access, and the Department’s failure to adequately comply with public record requests about fund expenditures.