The Land and Water Conservation Fund 101

The Land and Water Conservation Fund (LWCF) has been the principal funding source to acquire federal land for conservation and recreation purposes since 1965. The four federal land management agencies—the Bureau of Land Management, Fish and Wildlife Service, National Park Service, and Forest Service—all receive money from the LWCF. Unlike many federal programs, the LWCF does not rely on taxpayer money. Instead, it is funded primarily through the revenues the federal government earns from oil and gas leases on offshore federal lands.

The LWCF also serves as a major source of funding for state and local parks and public outdoor recreation facilities. Over the past 40 years, the fund has provided over 40,000 grants to state and local governments. According to the National Park Service, the agency that runs the LWCF state grant program, a majority of the state and local funding has sponsored “close to home” recreational opportunities that are accessible to Americans from all walks of life.

This explainer provides a brief history of the LWCF and its funding, a description of how the program works, an overview of recent legislation affecting the LWCF, and an assessment of future challenges the program faces.

Following recommendations made by the Outdoor Recreation Resources Review Commission (ORRRC), which was established by President Eisenhower in 1958, the LWCF was created through the 1964 passage of the Land and Water Conservation Fund Act (P.L. 88–578). The ORRRC operated over a four-year period that ended with release of a 27-volume report on the state of America’s outdoor resources that included recommendations for the future. Apart from the LWCF, these recommendations informed key pieces of legislation such as the Wilderness Act (P.L. 88–577), passed and signed into law in 1964; and the Wild and Scenic Rivers Act (P.L. 90–542) and the National Trails Act (P.L. 90–543), both passed in 1968. For more information on the ORRRC and subsequent recreation review commissions, see Siehl (2008; linked above) and Walls (2018a; see source). The National Park Service also provides historical information on the LWCF (linked above). In its final report, the ORRRC recommended a dedicated source of federal funding in addition to comprehensive state planning for outdoor recreation resources. The LWCF Act incorporated both of these recommendations and provided a suggested formula for allocating LWCF funds to US states and territories—40 percent of the money was to go to the federal agencies and 60 percent to states unless the appropriations bill stated otherwise.

The LWCF initially had three sources of revenue: proceeds from sales of federal properties, motorboat fuel taxes, and fees for recreational use of federal lands. However, it quickly became clear that this funding was insufficient for meeting the goals of the program. In 1968, Outer Continental Shelf (OCS) federal oil and gas leases were tapped as an additional source of revenue, and the LWCF’s funding was increased. It was increased again in 1971 and 1977, finally reaching its current value of $900 million annually. Offshore leases continue to be the program’s main source of revenue.

The LWCF Act expired in 2015. Despite bipartisan support, Congress could only agree on a three-year reauthorization of the legislation. However, in March 2019, the John D. Dingell Jr. Conservation, Management, and Recreation Act (P.L. 116-9) permanently reauthorized the LWCF Act.

Appropriations

Although the LWCF is authorized to receive and distribute $900 million per year, Congress determines how that money is actually spent through the annual budgetary appropriations process. Some programs, including long-standing federal wildlife conservation funding programs, directly allocate spending without going through appropriations. See Walls (2018) for more about these programs and a comparison to the LWCF. As a result, in most years, LWCF programs have received far less than $900 million. In fact, less than half of the money deposited into the fund since 1965 has actually been spent. The unappropriated balance, or the difference between the cumulative amount deposited and the amount spent between fiscal years 1965 and 2019, is $22 billion.

Federal and Stateside Allocations

Annual LWCF spending is allocated to federal activities and a state financial assistance program. While the original legislation allocated 40 percent of the money to the federal side and 60 percent to states, the language was amended in 1976 to eliminate any mention of the amount to states and to say that not less than 40 percent should go to the federal side. Since then, most of the money has gone to the federal side. The 2019 John D. Dingell Jr. Act changed the language again, this time specifying that not less than 40 percent be used for federal purposes and not less than 40 percent be allocated to states.

Federal Spending

Federal spending in the LWCF was originally envisioned as only for land acquisition, such as adding to the national park system. But since FY1998, money has been spent on other activities and programs, including maintenance needs of the four land management agencies. The federal fiscal year (FY) begins on October 1 and ends on September 30; the fiscal year is labeled based on the year it ends, so “FY1998” refers to the period from October 1, 1997 through September 30, 1998. The additional spending has been limited to two programs since FY2008—the Forest Service’s Forest Legacy program and the Fish and Wildlife Service’s Cooperative Endangered Species Conservation Fund. As described below, these extra uses of LWCF make up a significant portion of annual spending.

How State Funding Works

The state financial assistance program is a matching grant program for state and local public outdoor recreation projects. Projects are only eligible to receive up to 50 percent of their funding from the LWCF; the rest must come from state and local project sponsors. Money is allotted to states using an established formula: a portion of the money is divided equally among all states and territories, and the remainder is allocated based on needs (partly determined by state population). No more than 10 percent of total stateside LWCF spending can go to a single state.

The Gulf of Mexico Energy Security Act (GOMESA) of 2006 provided additional funding for the LWCF stateside program. Under GOMESA, 12.5 percent of the revenues from certain offshore leases in the Gulf of Mexico go directly to LWCF state grants. This spending is mandatory and does not go through Congressional appropriations. In FY2019, GOMESA funds for the LWCF totaled $71.6 million.

In addition to the traditional state grant program, which is allocated based on formulas, a competitive state grant program has been in place since FY2014. The program targets urban areas and prioritizes projects in low to moderate income neighborhoods that are under-served by parks and other outdoor recreation resources. The program is relatively small but has grown over time; $20 million in spending was authorized in FY2019.

Figure 1 shows yearly spending in the three parts of the LWCF program—federal land acquisitions, state grants, and, beginning in 1998, other federal programs.

Several trends are clear from the graph:

• Annual spending has fluctuated significantly over the years.
• The full $900 million has been spent in only two years, FY1998 and FY2001.
• Since the early 1980s, state grants have declined as a share of total LWCF spending. From FY1965 through FY1981, state grants accounted for 58 percent of annual spending on average. That figure dropped to 13 percent over the FY1982-FY2017 period. In FY2018 and FY2019, state grants rose because of the GOMESA funding.
• Spending on other programs beyond federal land acquisition and financial assistance to states is significant. Between FY1998 and FY2019, other programs accounted for 28 percent of spending, on average, each year.

The numbers in Figure 1 are not adjusted for inflation. Figure 2 shows total LWCF spending in inflation-adjusted 2019 dollars and highlights the sharp difference between spending in the 1970s and later years. At its peak in FY1978, inflation-adjusted LWCF spending was 6 ½ times the level of spending in FY2019. Since the early 1980s, spending has been relatively constant, in inflation-adjusted dollars, with the exception of two upticks in 1998 and 2001.

In total, approximately 8 million acres of new parks and recreational lands have been added to the American recreation estate using LWCF funds—5 million acres through federal land acquisitions and 3 million via the state grant program. Thousands more acres have been protected with LWCF dollars used on state and local park development projects.

The four federal agencies that receive LWCF money through the federal side of the program—the National Park Service, Fish and Wildlife Service, Bureau of Land Management, and Forest Service—purchase lands to add to existing protected sites or create new ones. Oftentimes, privately-owned land tracts inside national parks, national monuments, and other federal protected sites—pockets of land known as inholdings—are targeted for purchase. Between 2000 and 2018, for example, the Bureau of Land Management used LWCF funds to purchase over 12,600 acres of private land inside Cascade-Siskyou National Monument in Oregon. The National Park Service used LWCF money in 2018 to purchase the largest private land tract—2,500 acres—inside Black Canyon of the Gunnison National Park in Colorado.

Roughly 42,000 LWCF grants have been made since FY1965 to the 50 states, District of Columbia, and five US territories. Twenty-six percent of these grants have been used for the acquisition of lands for new state and local parks and recreation areas. The remaining grants have been used on park development projects. Every county in the United States has at least one LWCF-supported recreation area or facility. These vary from large nature-oriented state and regional parks to small urban parks with playgrounds, swimming pools, and ballfields. Using National Park Service data, the Wilderness Society has created an interactive map showing every project funded by the LWCF between 1965 and 2014. The LWCF Act requires recipients of state grants to maintain the land acquired with LWCF funds for public outdoor recreation use in perpetuity. States can petition the Secretary of the Interior to abandon a site but that typically is only approved when another site is replacing it.

The problems created by a reliance on annual Congressional appropriations—wide swings in LWCF spending from year to year, declining funds for state programs, and money used for purposes outside the original intent of the enabling legislation—have not gone unrecognized. Conservation and outdoor recreation advocates, including some members of Congress, have tried at various times over the years to change and amend the LWCF in ways that would make funding more sustainable. The most serious efforts were in the late 1990s and early 2000s. The Conservation and Reinvestment Act (CARA), introduced in Congress in 1999, would have combined LWCF with other funding sources to create guaranteed funding of $2.4 billion per year. At approximately the same time, President Bill Clinton proposed the Lands Legacy Initiative, focused on land acquisitions for conservation. See Zinn and Corn (2001) for a discussion of these proposals.

The tide for the LWCF appeared to finally turn in 2019 and 2020 with the 116th Congress. In early 2019 the John D. Dingell Jr. Conservation, Management, and Recreation Act permanently reauthorized the LWCF Act. It also created a rule for allocating funds across the federal and stateside programs to ensure that spending in the oft-overlooked stateside program is roughly equivalent to the federal side.

In 2020, the Great American Outdoors Act was signed into law. It states that, beginning in FY2021, money deposited into the LWCF is available for spending “without further appropriation.” The Act also creates a five-year fund, capped at $9 billion, for deferred maintenance projects on lands managed by the National Park Service and the other three land management agencies and education facilities managed by the Bureau of Indian Education.” In other words, there is deferred maintenance on those buildings and things and it would pay for that. This act is probably the biggest change in the history of the LWCF program. It makes a full $900 million per year available each year for new federal and state conservation projects. Appropriations have reached $900 million in only two years in the program’s 55-year history, and annual LWCF spending has averaged (in nominal terms) $388 million per year. Thus, the Great American Outdoors Act greatly increases the amount of funding for new conservation and outdoor recreation areas in the United States.

In 2020, the LWCF program appears to be on a better footing than in recent decades. However, two issues regarding funding are of concern.

Inflation: The $900 million authorized for the LWCF each year has stayed the same since 1977. Adjusting for inflation, $900 million in 1977 is equivalent to $3.4 billion in 2020. Recognizing that land acquisition and development costs are substantially higher in 2020 than they were in 1977, many observers have argued that indexing the LWCF to inflation is an important part of maintaining its value for future generations .

Oil and Gas Revenue: The reliance on revenue from offshore oil and gas leases is of growing concern. As the United States begins to address the climate challenge and reduce fossil fuel use, oil and gas production is likely to decline. Furthermore, some politicians and stakeholders are pushing for the federal government to lead the way on climate action by reducing or ending oil and gas leasing and production on federal lands (such as through the proposed American Public Lands and Waters Climate Solution Act of 2019). As a result, oil and gas lease revenues are likely to decline in the future. Finding a new source of revenue for the LWCF is likely to be an important part of the policy discussion in coming years.

Finally, future issues are also likely to revolve around the best uses of LWCF funds to meet the needs of the 21st century. One important question is whether populations with the greatest needs are receiving investments in new park and recreation opportunities. The competitive grant program described above, which started in FY2014, targets urban areas with relatively few parks and recreation resources, but it is a small share of overall LWCF spending. The direction of federal spending may be an important policy discussion in the future.