New report shows Alaska would inherit major expenses if federal lands were transferred

The federal government spends about $164 million each year managing its land holdings in Alaska, a tab that could fall to the state if efforts to sell off or give away federal lands gain momentum.

A recent study by Northern Economics examines the impact of how such land transfers could affect management costs, as well as changes to federal payments to local and state governments, subsistence management and wildfire management responsibilities. In recent years, Congress and federal policymakers have advanced proposals to sell, transfer or otherwise reduce federal public land holdings, particularly in Western states, while also debating changes to the boundaries and management of certain national monuments.

The Nature Conservancy (TNC) funded the study to better inform the discussion around the potential costs and benefits of public land sales or transfers in Alaska, as the sale of public lands continues to be a topic of national discussion.

“At a time when Alaska is facing a budget crisis, this study puts real numbers to the potential cost to the state to care for our national forests and other public lands. These are costs the state cannot afford, especially while we struggle to make ends meet for our schools, ferries, and other vital services,” said Kelsey Schober, TNC Alaska’s government affairs director.

Alaska’s land is largely managed by federal agencies, the State of Alaska, Alaska Native corporations and Tribes, and private owners. Federal lands account for about 57% of Alaska’s land base, with Bureau of Land Management (approximately 70 million acres across the state) and U.S. Forest Service lands (about 23 million acres in Southcentral and Southeast Alaska) representing a large portion of the lands that have previously been considered for transfer.

Read the executive summary: Fiscal Impacts of Land Transfer in Alaska

The fewer acres, the less funding

The Alaska Department of Natural Resources currently spends about $83.4 million across about 100 million acres on land management. The addition of federal land transferred to the state would increase land management costs paid for by the state, although to what degree depends on the amount of land and where it’s located, among many other factors.

Likewise, federal payments to local and regional governments for key public services are often based on how much acreage is owned by the federal government nearby. The fewer acres, the less funding.

The programs examined in this report have provided over $1 billion (in real 2025 dollars) to Alaska communities, local governments and school districts since 1999. Payments in Lieu of Taxes, sometimes known as PILT funds, help local governments provide public services like firefighting, policing, schools and more. This program provided $908 million to Alaska (in real 2025 dollars) between 1999 and 2025, with the Mat-Su Borough, Kenai Peninsula Borough and Bethel Census Area being the top three recipients in 2025. National Forest Receipts and Secure Rural Schools-related payments support school systems near the Tongass and the Chugach National Forests. From 2013 to 2024, this provided $115 million to local governments and school districts, with Valdez, Ketchikan, Wrangell and Annette Island being top recipients in 2024.

Wildfire management and subsistence management would also be impacted, at both an increased cost to the state as well as a loss of federal support. Alaska’s wildfire system relies heavily on interagency coordination between Alaska Division of Forestry and Fire Protection, Bureau of Land Management, Alaska Fire Service, U.S. Forest Service and other partners. Unless federal wildfire support and cost-sharing arrangements continued on transferred lands, Alaska could be forced to absorb the expenses of fire activity on federally transferred land. Subsistence management would also be impacted—both in terms of increased costs to the state, as well as changes in subsistence governance and access in certain areas.

Overall, federal land transfers would shift recurring management costs, reduce or reallocate federal payments to local governments, affect subsistence priorities and administration, and alter wildfire management obligations.

At the same time, Alaska continues to face difficult budget decisions. State leaders are navigating long-standing fiscal pressures, including structural deficits, debates over the Permanent Fund Dividend, and challenges in fully funding public education and essential services. Any additional financial responsibility of this scale would require tradeoffs in an already constrained budget environment.

“This report makes it clear that taking responsibility for the federal government’s vast land-management portfolio in Alaska would come with many painful tradeoffs,” Schober said. “Our goal is to offer lawmakers the information they need to consider the full scope of any proposal like this.”