Pinchot’s Promises to Counties: History Remembered

The Use Book Committee

The Use Book Committee

Here’s a link to the op-ed.

Congress recently passed and the president signed a one-year extension of Secure Rural Schools (SRS). Most commentators, however, see dim prospects for SRS’s renewal beyond 2014. The SRS program has been widely characterized as an interim safety net and transitional measure intended to tide counties over a period of dwindling timber harvests on national forests. It’s been said – even back in 2000, when SRS began – these payments were never intended as a long-term or permanent federal program. SRS would merely lend counties a hand as they shifted and diversified their local economies, making them less dependent on federal timber harvests.

Yet, this characterization of SRS misrepresents and misremembers a deeper and ongoing federal obligation to counties with national forests. Congress enacted a 10 percent timber revenue sharing measure in 1906, only a year into the Forest Service’s young life, and then raised the county share to 25 percent in 1908. The sharing provision sprang from a general recognition that counties hosting national forests suffered hardships on that account. Most notably, wherever national forests were laid out, counties lost potential property tax revenues, which in turn implied an increased tax burden for private landowners. Property taxes collected by local governments have traditionally supported schools, roads, police and fire protection, libraries, and other local services. Federal ownership also blunted potential growth in population and commerce. Moreover, counties retained the responsibility and expense of maintaining roads in national forests. The national forest land grab was by no means trivial. Here in Idaho almost 40 percent of the state’s area was appropriated for national forests. In our county – Shoshone County, Idaho – fully 72 percent is national forest.

Small wonder Idahoans and other westerners fought vigorously against the great and rapid expansion of forest reserves and national forests in the first decade of the 20th century. For his part, Gifford Pinchot, the national forest system’s great architect and advocate, sought to reassure westerners that their perceived negatives were really positives. In his 1907 book, The Use of the National Forest, Pinchot argued that federal forest ownership wouldn’t limit the uses of these lands but instead would insure that they achieved their highest use. The homesteader, the miner, the stockman, and “the small mill man” could go about their enterprises unfettered by the national forest designation, Pinchot confidently suggested.

Pinchot specifically addressed the issue of lost county property tax revenues in a section of the book titled “What happens to county taxes?”

“People who are unfamiliar with the laws about National Forests,” wrote Pinchot, “often argue that they work hardships on the counties in which they lie by withdrawing a great deal of land from taxation. They say that if the lands were left open to pass into private hands there would be much more taxable property for the support of school and road districts. The National Government of course pays no taxes. But it does something better. It pays those counties in which the Forests are located 10 percent of all the receipts from the sale of timber, use of the range, and various other uses, and it does this every year. It is a sure and steady income, because the resources of National Forests are used in such a way that they keep coming without a break.”

From the get-go, the chief purpose of the Forest Service’s timber revenue sharing was compensation for lost county property tax revenue. This provision was a foundational feature of the new Forest Service agency. Huge expanses of national forest land inevitably imposed (and continue to impose) great losses in property tax revenues upon counties. SRS, initially passed in 2000, provided for compensation of counties when timber revenue broke down. When SRS sunsets after 2014, however, the federal obligation to compensate for lost property tax doesn’t evaporate. Property tax is collected year-by-year by counties. Hence, compensating for lost property taxes isn’t a one-time, sometime, or time-limited matter. In our county – as in many counties – three years of delinquent property tax payments results in a property’s title being transferred to the county. Come to think of it, we’re not averse to applying the same principle to our county’s national forest lands. We need a long-term solution to the issue.

This column was written by the following: Jim Best, Leslee Stanley, and Larry Yergler, Shoshone County commissioners; and Chris Asbury, William Woodward, Robin Stanley, Dr. Robert Ranells, school superintendents in Avery, Kellogg, Mullan, and Wallace (respectively).

16 Comments

  1. The percentage was of the gross revenue. The Feds paid off the top. No deductions that would pay money to the agency for the agency. Even in the 19th century, Congress knew bureaucrats would mine resources for pay for their comfort, and prevented that by taking a percent off the top. I believed it was 25%, but I could be wrong. Take 25% off the top of any business and it can’t exist in short order. The 25% was punitive, and for a reason. Congress kept a short rein on agencies of the Administration when it came to US resources on US land. Over time, the USFS cadged that with all the “add ons” to a timber sale contract for slash disposal, K-V funds, road use, etc.( only because Congress would budget them less than their annual revenues from resource sales and leases.) But the pertinent Presidential quote in any discussion of this type is the current President’s statement concerning his agenda and Administration: “You will get to keep your insurance. Period.” Use that as the backdrop for any discussion of interaction between any Administration and the People.

    Counties were the interface with U.S. and “the People.” That kept state government, congressional districts, and cities from crowding to the front of the line and intercepting U.S. payments as required by all the original Organic Acts involving the Feds for quitting the disposal of Louisiana Purchase and other U.S. expansion lands. We have gone from a Federal government disposing of land (the original purpose of the General Land Office, now BLM) to one that is grabbing more and more of the once private land base through purchase and condemnation, using money from royalties gained in off- shore drilling for oil and gas. All “for the people”, you know (read urban people.) And mind you, all the while printing trillions of new dollars or more, new money, each year to cover borrowing costs. The Great Federal Ponzi scheme involves land grabs. Yet due to the paucity of possible and probable votes in lightly populated counties where Federal land dominates, Congress just can’t find it in themselves to do other than contract, shrink, the PILT kind of payments all the while offering free health care to the urban poor horde where the votes are. I would proffer that forests are managed, and have been all along, by principles of social science, social engineering, and political science, with biological sciences as litigation paradigms. And I don’t see any forthcoming change. When the US Attorney can gain compensable damages for resource destruction by fire attributed to a private ignition source, those damages including “loss of grandeur of the landscape,” to the tune of tens of millions of dollars, Congress can find a way to pay for schools, sheriffs, running a county courthouse, just on the rewards of “grandeur of the landscape.” Annual payments from Congress is the only way. Pay enough to the counties to support themselves, to have decent schools, government infrastructure, and the whole of the logging issue, resource use issues, goes away. Not unlike that percentage of Americans who are without affordable health care, all it takes is a transfer of money from one demographic to another to level the playing field, does it not? Pay the counties fairly, enough, and don’t let Federal land fires burn private assets (tort limitations disallow any meaningful damages to be assessed against a guilty US Govt.), and perhaps the whole of the use of locked up land will just fade into the smoke. We currently do that with billions of tax payer dollars for education in poor areas, for Migrant Head Start in my town, for grand and glorious Federal Courthouses in urban areas, for grand and glorious Regional Offices, in urban areas, for the whole of the infrastructure of Washington DC, for bureaucratic excess revealed daily, in urban areas. Just pay the rural counties for their Federal lands and solve the problem. Pay them on potential resource value and pay them the PILT on a per acre basis as well.

    If you don’t think that fair, how about this: That Federal Courthouse has police and fire protection, public access by public transportation, all paid for with local property tax receipts. The Feds get a free ride. And so do states and non profits that pay no taxes at all. Use the Federal receipts and ability to print money to pay the counties with Federal land a fair an equitable PILT payment each year. Even the non-profit NGOs should support that. They are, in fact, subsidized by taxpayers in the form of being tax exempt. We don’t want “subsidized” timber sales, so just subsidize the counties.

  2. The fact is, the SRS scheme didn’t work. Even Headwaters Economics admits that many rural areas denied access to natural resource production in the absence of “amenities” are way behind where they were when the spotted owl (and and and) hit.
    SRS was just a bribe, a buyoff to blunt the outrage, round off the sharp edges, to keep the clock ticking without causing a political critical mass. With SRS likely to go away thanks to the deficit, I would suspect that the day of critical mass is approaching for a divestiture of the federal surface estate to the states, along with supporting changes in federal law.
    Do I fear that? Nah. In Montana, the state (and tribes) do a pretty good job of multiple-use sustained yield. As far as I’m concerned, the feds can have the parks and wildernesses, and the parkies can manage those. The federal staffers who want to work, should be welcome in the state agencies that assume the task of bringing off a return to multiple use.

  3. I remember being disappointed when our county commissioners signed off accepting payment not connected with the harvest of timber. Knowing that eventually we would be looking at lower and lower payments. As everyone, they didn’t really worry about the lack of timber harvest till is started effecting their budgets.
    I now the new buzz word for us out here rural Oregon, (why would anyone want to live here anyway) is that Portland thinks we should just raise our personal taxes. They never mention how we are suppose to pay for them.
    Maybe the best answer is the for the states to take over these lands. Though it certainly is a failure for us as a nation that we can’t figure out how to manage our public resources. No action is ever really an option because, as we have seen, if we don’t manage them, nature will.
    Most of the timber people in the FS and BLM who I have contact with would really like to do more, but it always seems like the from the district ranger on up it all politics. Seems like also there is always some biologist hiding somewhere who says things like “the district is deficient woody debris” and all of sudden it becomes fact.
    Maybe it is time for the “ologist” to come to the rescue. Are there none that think we can log on a hillside 2,000 ft about a creek and not harm the creek? Are there none that think that maybe creating some economy with this resource might be a good idea, and come up with BMP?
    I think we can log right next to a creek and not harm it,( but here I am getting started again). But somehow its ok for “them” to log right in the creek for the fish habitat, but if we drag a log to harvest it that’s a mile away, oh bad, bad.

    • Stump

      Re: “Maybe the best answer is the for the states to take over these lands”
      –> I agree, but the enviros won’t allow it since they will loose most of their control over the lands and the tenth amendment (states rights) has been usurped so this isn’t going to happen.

      Re: “Maybe it is time for the “ologist” to come to the rescue”
      –> Now you are really dreaming. 🙂 As you said “there is always some biologist hiding somewhere who says things like “the district is deficient woody debris” and all of sudden it becomes fact”. People, like some on this blog site, will take a biologists word over a forester’s word anytime. So it is time to wave the white flag for several more decades and let things continue to deteriorate to where they can’t blame foresters and what happened pre 1990 for their colossal failures over the last 20+ years. There is a remote possibility that congress will recognize the failure while considering a budget and decide to act but, I’m not holding my breath. Ultimately only congress can do anything to change things which is why forest planning at the federal level is an exercise in futility until congress acts effectively to provide non conflicting direction through law.

      Re: “somehow its ok for “them” to log right in the creek for the fish habitat, but if we drag a log to harvest it that’s a mile away, oh bad, bad.”
      –> If my memory serves me correctly, the RCW rules at one time wouldn’t allow trucks within so many feet of a colony for fear of traumatizing the birds, yet the biologists could climb their trees, stick their hands in the cavity, drag the bird out and band it – of course that “didn’t traumatize the birds”

      I came to this blog thinking that we could have an honest and open two way discussion about what was best for our national forests. I was totally wrong, everything that I’d heard about dealing with enviros has been proven true. They aren’t interested in a two way conversation and they will dismiss fact that disagrees with their mantra in a New York minute.

  4. “The sharing provision sprang from a general recognition that counties hosting national forests suffered hardships on that account. Most notably, wherever national forests were laid out, counties lost potential property tax revenues, which in turn implied an increased tax burden for private landowners. Property taxes collected by local governments have traditionally supported schools, roads, police and fire protection, libraries, and other local services.”

    I’ve always wanted to ask somebody about this. I thought property taxes were based on the idea that use of the property leads to a need for government services – usually related to homes or businesses built on the property. So county local government costs are more or less proportional to the acreage actually available for private development. Federal lands do not create a need for schools, libraries or other local services. National forests generally have their own law enforcement and fire protection. I’m not sure how road maintenance works, but counties shouldn’t have to provide more than what they need for themselves (this would be most challenging in a highly fragmented ownership pattern). So, in general, it seems like federal lands don’t generate a need for property taxes. Where is the hardship? What am I missing here?

    • Jon suggests that “property taxes were based on the idea that use of the property leads to a need for government services – usually related to homes or businesses built on the property,” which suggests a rational basis for exempting federal land from local property taxes. It’s a nice theory, but likely not true. Property taxes were intended originally to be a progressive and politically acceptable source of local government revenue. Progressive because ad valorem property taxes require those with more wealth to pay more tax. Politically acceptable because much property is owned by absentee landowners, shifting the burden to those both able to pay and unable to do anything about it at the voting booth.

      • Since we’re talking about forest lands, it’s worth pointing out that forest lands are generally not taxed via ad valorem, but rather via severance taxes. If the federal lands were taxed like other forest lands, the counties would get far far less money than they get from SRS or almost any other federal contribution. This brings into question the op-ed authors’ assertion that federal lands represent a loss of tax revenue. (“Huge expanses of national forest land inevitably imposed (and continue to impose) great losses in property tax revenues upon counties”) It just is not true.

    • “So county local government costs are more or less proportional to the acreage actually available for private development.” Not true, but I am not sure how to explain this.
      If 70% of the land in your county is own by the federal government, which mean you are essentially a rural county. Which mean your economy is mostly likely based on the production of products from natural resources, animal production, agricultural crops, timber, and possibly fishing. (Products that are enjoyed by the urban populations and necessary to their economic and social well being.)
      And if, as in many parts of the west, much of your economy was based on timber production from federal lands and those land are suddenly 95% off limits to all timber productions the results are immediate.
      Your economy crashes. The people in the lose their jobs, move, close there businesses. The school populations decrease, tax revenue decrease. The ability to attract and open new businesses decrease. Social economic problems increase.
      It’s not a pretty picture, though the scenery on the surrounding hills might be.
      Which also means we can no longer support our county government infrastructure.
      I suppose you might continue on your theory and suggest that we should just close up shop and move.
      But you might want to think about that too. If you want something to eat, or something to build with, or someone to keep the road open so you can come visit the forest, you might want to keep us around.
      I find this idea that is ok to shut down our federal lands and pay nothing in “lieu of taxes”, and to hell with the local people incredible arrogant.

      • Stump – I think you have done a good job of describing the problem. It’s mostly not about land ownership or taxes, but about how land is used to contribute to a local economy. I think I am agreeing with John Thomas’ suggestion to address the problem directly as a question of whether we should subsidize rural counties – either as a general principle, or as an obligation due to past reliance on public lands policies. And if so, should we do that by making products available for an industry, or providing jobs in the woods or some form of direct payment? Those are hard questions that are also hard to tee up for legislative attention. (Which is why I’ll go back to my comfort zone of working with the public land laws we’ve got.)

        • Jon, I just wish they would give us access to the resource. I am not talking about billion ft timber sales. I think if they would go back to the green sheet sales, where a local sale administrator could sell down timber to local interests whether it be one tree or 10 tuck loads would do more for the local economy then all the thinning sales put together. Of course I am talking about larger diameter trees that have died, blown over or are about to fall over. There isn’t a watershed in Oregon that couldn’t have one or two small sawmills surviving on salvage from our forests.
          I always wonder who is subsidizing who? It’s our land too.

        • Jon, it is about land ownership. There are plenty of rural counties in which this is not an issue, say in the South, where people simply live and grow crops or livestock or cut trees. Based on the ownership, each owner does what they want to do AND PAYS RELEVANT TAXES.

          In communities and counties in which there is mostly federal lands, “conservation” groups through litigation and funding campaigns, seem to determine what is done with the land, and the feds do not pay taxes.

          If the area were in Malaysia, and a conservation group bought up land around a community and would not let them access the forest for their traditional uses, we would think that that was wrong and vaguely colonialist. Especially if they did not pay taxes. That’s why the international conservation community is so nuanced about the issue of local communities.

          Matthew Carroll (of WSU) once called something like this “domestic imperialism” at a meeting I attended.

          • I liked Tree’s inference that land that is doing nothing should cost local governments nothing – regardless of who owns it.

            For the sake of argument though, I guess my question would be why counties in the south can live on the taxes they get and counties with public lands can not. Maybe they collect fewer taxes than if the land were more economically productive, but they also shouldn’t need to provide as many services. Am I wrong? (We’re not talking about places where ‘unmanaged’ lands could actually contribute more to the economy, and indirectly to tax revenues.)

            I also don’t see why we should necessarily feel the same way about land set-asides more than a century ago by our elected government as we would about anything a non-citizen would do in a developing country today.

            • Tree it is true. They represent a huge lost of tax revenue. Forest land are often tax both ways, every year as property tax and when you harvest. (We use to receive $500,000.00 per year for our school district from the Coos Bay Wagon Road fund, now we received nothing, this is not make believe.)
              If our lands are not producting something then they are a drain on the economy. You should know there is no such place as “neutral”, you are either going up or you are going down.
              The land is never doing nothing. Maybe if we had never entered our public lands and there were no roads, no harvests, no visitors, no access, a virtual no-mans land this might be true.
              But that is not how it is. Of course such a case would be impossible, there will be and always have been people on these lands. (even if we all end up being criminals).

  5. As Mikey used to say on the Life cereal commercials “Life is hard”

    People on this site generally have a strong dislike for big business but, imho, they are no worse than the government. The people that run both are mostly the same self centered, ego driven individuals with about the same proportion of honorable and dishonorable leaders. We are all imperfect but we only expect others to be perfect.

    Pinchot has no fault in this just as our founding fathers have no fault for the abandonment of our constitution and bill of rights when it is convenient to those currently in charge. The people are either asleep at the wheel or self centered and willing to sell their votes to the one who promises them the most. The people don’t have principles, why should the politicians? They play us like fiddles and we never learn.

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