Billionaire Surcharge Tax

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Out-of-state landowners are purchasing immense tracts of land in Montana for private game preserves… and locking Montanans out.

Funding to Restore Public Access

Three moose.

Closing private lands, as well as access to public lands, goes against long-standing Montana traditions.

Montana’s wildlife is for sale. While it is theoretically illegal to privatize wildlife in Montana, rich out-of-staters are circumventing the law by purchasing immense tracts of land and locking Montanans out. Traditional Montana landowners historically allowed public hiking, fishing, and hunting on private lands. Now we are overrun by multimillionaires and billionaires who acquire big ranches and post No Trespassing signs to keep Montanans out. They often consolidate numerous neighboring family farms into bigger and bigger megaranches, which they enjoy as private wildlife safaris for their own hunting pleasure. This unneighborly trend has effectively shut down much of Montana to outdoor recreation, hunting, and fishing.

Any Montanan who loves the outdoors has felt the impact of these megarich newcomers, yet the rich contribute shockingly little tax revenue to compensate for their oversized impact on Montana. To address core issues and rebalance public access, I propose a modest “Billionaire Surcharge Tax” for property owners with 20,000+ acres of land in Montana. Proceeds from the tax will be directed towards public access programs such as Block Management to reward landowners who continue to allow public access.

The Problem

Texas billionaire brothers Dan and Ferris Wilks made their fortune in the fracking business, then cashed out and brought their money to Montana. They bought the 62,000-acre N-Bar Ranch southeast of Lewiston in 2011 then started gobbling up neighboring ranches to expand their estate to 358,837 acres (560 square miles) by 2015. Like other billionaires and multimillionaires who come to Montana, the Wilks brothers posted No Trespassing signs and closed the ranches to traditional public access, plus they terminated access to public parcels encompassed within their mega-estate.

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Texas billionaires Dan and Ferris Wilks bought multiple ranches in central Montana since 2011, totaling 358,837 acres (560 square miles), including prime elk habitat.

The Wilks’ empire encompasses the elk-rich Durfee Hills, public land administered by the Bureau of Land Management (BLM). Previous owners allowed public access across private land to access the Durfee Hills, but the Wilks brothers ended the public goodwill, making it impossible to access the Durfee Hills without an airplane. Then they tried to push a land swap to give the BLM more accessible land in exchange for title to the Durfee Hills. Local hunters successfully shot down the proposal, because the land being offered wasn’t prime wildlife habitat like the Durfee Hills. Hunters concluded that it was better to access the Durfee Hills by airplane than not at all. When the deal failed, the Wilks brothers cut a swath around the Durfee Hills and erected a fence posted with “No Trespassing” signs. They also closed off public access to an unrelated parcel on Bullwhacker Road, trying to force the public to buckle to their land swap proposal.

Dan and Ferris Wilks are more visible than other billionaires in the state because of the size and speed of their acquisitions and their aggressive approach towards the public. In less than five years they bought enough ranches to become the biggest private landowners in the state, not counting corporate timberlands. Controversies landed them in the newspapers many times, yet the core issues began years before, when the first rich newcomers began purchasing large tracts of land for private wildlife safaris.

Montanans historically enjoyed a long-standing right to roam the open countryside across public and private lands. Known in Sweden as allemansrätten, “the everyman’s right,” the right to roam has been legally recognized and expanded across many European countries, as detailed in my article Posted: Please Trespass. Montana citizens owned the right to roam until the 1980s, when newcomers began buying large tracts of land and locking the public out. Montanans lost access to private lands where they had previously hiked, camped, fished, and hunted.

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Some of these mega ranches are so immense that game animals seldom leave the property, effectively creating private game preserves.

Many of these ranches are such immense tracts of land that game animals seldom leave these private estates. These are defacto private game preserves where landowners enjoy private hunts, or sell hunting rights to other megarich individuals. A guided elk hunt on these mega ranches sells for up to $15,000. The rich own the land and the wildlife, banning common folk from hunting or even walking there. Feudalism was long ago rejected as reprehensible in Europe, yet we have allowed feudalism, or rather neofeudalism, to take our land and erode our rights here in modern day Montana, as detailed in my article Overlords of Montana.

Collectively, wealthy interlopers are buying up more and more of Montana and eroding our rights, yet contributing shockingly little in taxes. The average property tax on rural, agricultural land in Montana is about 65¢ per acre. The very rich claim residency out of state, so they do not pay Montana income taxes. They have an oversized impact on the Montana way of life, yet contribute very few tax dollars to offset those impacts.

A Solution

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Funds from the tax could help support Block Management for hunter access or applied towards the purchase of land or easements to access land-locked public lands.

One way to help restore balance in Montana is to apply a surcharge property tax on megaranches, directing proceeds towards public access enhancement programs. For example, a surcharge tax on parcels greater than 20,000 acres would apply to only 128 landowners in Montana. Tax proceeds would be directed towards programs such as Block Management, a cooperative private-public partnership between landowners and Fish, Wildlife, and Parks that pays landowners to provide free hunting access to private land, and sometimes to adjacent public lands. Tax funds could also be used to purchase access routes to public parcels that are currently locked up within private lands. A modest $1 per acre surcharge tax on parcels of 20,000 acres or more could potentially raise several million dollars per year to help fund public access.

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Landowners would be exempt if they claim residency in Montana and pay state income taxes.

To avoid double taxation, landowners who claim residency in Montana and pay income taxes in Montana would be exempt from the surcharge. In addition, any out-of-state landowner not wishing to pay the tax could choose an exemption by allowing continued traditional public access to their lands. Those who wish to block public access could do so and pay the surcharge tax. Either way, the surcharge tax would help restore balance in Montana, even if all megaranches chose the exemption and paid no taxes.

Dan and Ferris Wilks would be among the most impacted by the tax, contributing $358,837 per year towards public access programs in the state if they didn’t choose the exemption. Numbers on that scale sound unfathomably large to most of us, but not necessarily to the megarich.

Consider, Hamilton “Tony” James owns a 38,000-acre ranch near Twin Bridges, Montana, where he pushed through a land swap to take over 80 acres of public land on the Jefferson River known as Beaver Chew campsite on the Jefferson River Canoe Trail. James has a net worth of approximately $1.95 Billion, and an annual income of about $78 million from stocks and salary as the chief operating officer of Blackstone, a global asset management company. Dividing that down to a forty-hour work week, a $38,000 surcharge tax on Tony James Montana ranch is equal to approximately what Tony James earns in one hour.

Exemptions

Any landowner who honors the Montana tradition of open access should naturally be exempt from the surcharge tax. The exemption is especially important given that not all megaproperties are owned by the megarich. The biggest private landowners in the state include corporations such as Weyerhaeuser (formerly Plum Creek), nonprofits like the Nature Conservancy and the American Prairie Reserve, and a few historic ranches that have been handed down through generations of Montanans.

Weyerhaeuser is a forestry and logging corporation from Washington and Oregon that recently merged with Plum Creek from Montana, adding 765,925 acres of land to Weyerhaeuser’s operations. Weyerhaeuser has closed many of its western holdings to private use, except by lease, and there has been concern that the company might do the same in Montana. Fortunately, that has not happened yet, although Weyerhaeuser could change their policy at any time if they choose to. Implementing a $1 per acre surcharge tax would give Weyerhaeuser additional incentive to leave corporate lands open to public use and claim the exemption.

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Any individual landowner, corporation, or nonprofit that allows traditional access would be exempt from the surcharge tax, including The Nature Conservancy and the American Prairie Foundation.

The Nature Conservancy also owns extensive holdings in Montana, often acquiring properties then spinning them off to public entities. For example, prior to Plum Creek’s merger with Weyerhaeuser, The Nature Conservancy purchased 117,000 acres of corporate forest lands that were intermingled with public lands in the Blackfoot River watershed. These lands remain open to hiking and hunting, so The Nature Conservancy would be exempt from the surcharge tax. Ditto for the American Prairie Foundation, which has raised funds and purchased 84,141 acres of land (plus leased lands) for a public wildlife preserve in central Montana.

Also exempt would be historic Montana ranches where traditional hunting access is still honored, such as the Gordon Cattle Company, with 38,459 acres in north-central Montana Now under conservation easement, the easement includes hunting rights, guaranteeing access for future generations.

Of the 128 landowners with properties of 20,000 acres or more, many would choose to take the exemption, ensuring continued public access on large tracts of private lands. Therefore, the surcharge tax would likely apply only to megarich landowners who purchase properties for private game preserves. These landowners can afford to pay the tax, and likely would choose to pay the tax to continue blocking access to their private reserves.

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Seventy percent of the deer harvest in Montana takes place on private lands.

Maintaining public access to private lands in Montana is essential for hunters because one-third of the elk harvest comes off private property, along with 70 percent of deer harvest and 80 percent of the antelope harvest.

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Landowners sometimes charge up to $15,000 to hunt elk on their private game preserves.

The $1 per acre surcharge tax is not a significant burden to landowners who choose to pay it. For example, Ted Turner owns 148,870 acres spread across four different ranches in southwest Montana. An estimated 2,300 to 3,300 elk reside on Turner’s land, and wealthy hunters pay up to $15,000 for the privilege of hunting them. Therefore, ten of Turner’s elk would pay the entire annual surcharge of $148,870. These funds could significantly improve the public access situation in Montana by rewarding landowners who participate in Block Management to keep private lands open to traditional public access. Equally important, the funds could go towards acquiring access routes to public lands that are currently landlocked within or behind private parcels.

Fine-Tuning the Details

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The surcharge tax could help rebalance public access issues in Montana, even if all affected landowners chose the exemption instead of paying the tax.

The billionaire surcharge tax could help rebalance public access issues in Montana, and it is important to bring this proposal to the 2017 legislature for consideration. However, the tax proposal outlined here is not a perfect solution, and it will require some fine-tuning for implementation.

One issue is that name inconsistencies can complicate identifying large property owners in the state. For example, the Montana Department of Revenue identified 128 landowners with properties of larger than 20,000 acres, yet many names on the list are duplicates.

For example, Franklin Otis Booth, Jr. invested $1 million with Warren Buffett in 1963, which grew in value to $2 billion by the time Booth died in 2008. The Booth family ranch encompasses approximately 125,000 acres sprawled across both sides of the Montana-Wyoming border. In Montana, the Department of Revenue lists “Booth Land and Livestock” with 29,009 acres and separately lists “Booth Land and Livestock Company” with 34,132 acres, for a total of 63,141 acres.

The problem with these near duplicate names is that other landowners may own megaranches that are subject to the tax, but wouldn’t show up in the initial search due to name discrepancies. A landowner with two 19,000-acre ranches under different names would not have been identified in this basic search, and some manual sleuthing may be required.

Likewise, landowners could potentially dodge the tax by purposely registering different parcels under different names, bringing visible ownership under the 20,000-acre threshold outlined in this proposal. Professional bean counters will need to examine the variables and determine the best means to close potential loopholes. Nevertheless, the surcharge property tax outlined here is a solid proposal to begin a statewide discussion on the issue and how to balance public access needs in our home state. It is my hope that state legislators will introduce some form of the surcharge tax into the upcoming 2017 legislature.

Elpel.info logo.            Thomas J. Elpel lives in Pony, Montana. He is the author of numerous books on wilderness survival, nature, and sustainable living. He is the founder/director of Green University® LLC and Outdoor Wilderness Living School (OWLS).

Related Articles

The State Lands Shuffle: Facilitating a more holistic public dialogue
Overlords of Montana: A land and people conquered by money
Posted: Please Trespass: The Green Post Campaign to Reclaim Everyman’s Right to Roam
Freedom to Roam

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1 Comment

Filed under Conservation, Politics, Public Access, Wildlife

One response to “Billionaire Surcharge Tax

  1. Shane

    I’m not surprised somebody from Texas would move up to Montana and act that way. I’ve lived in Texas all my life and private property and money is king. Biggest state in the lower 48 and almost zero public land.

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