Rural counties scramble at loss of federal dollars: Denver Post

The article is about Mesa County but I couldn't find a map like this of them so this is San Juan County.

The article is about Mesa County but I couldn’t find a map like this of them so this is San Juan County. You can click on it if you want to see the names of the towns and roads.

This article was on the front page of the Denver Post. Again, I think it’s interesting what having regional newspapers means to what kind of coverage there is of regional issues. But, of course, all public lands are national issues. But what would a newspaper reader in San Francisco or New York or DC see in their paper about public lands compared to the Denver or Salt Lake or Boise or Missoula paper? Something to think about as the newspaper industry deconstructs..

Anyway, below is an excerpt. Note that D’s and R’s are together on this..and you don’t need lack of timber receipts for the issue to be a problem.

WASHINGTON — Colorado’s rural, mountainous counties that boast some of the most picturesque , yet isolated, scenery in the nation face the prospect of receiving $31.9 million fewer federal dollars this year.

The money was left out of last week’s budget deal approved by Congress and supported by President Barack Obama.

Known as “Payments in Lieu of Taxes,” or PILT, the federal payments backfill budgets in places such as Mesa County, which has a lot of federal land that doesn’t generate any property taxes. The dynamic puts Mesa at a disadvantage compared with, say, Denver County, whose dense population generates county dollars to take care of infrastructure, emergency services and roads.

Colorado is among the five biggest recipients of federal PILT dollars. Other large recipients include Utah, Wyoming and Montana.

“If any other property taxpayer in the country decided that ‘Money was too tight, I’m in a deficit situation and I’m just going to quit paying my property taxes,’ they’d find their property on the auction block,” said Mesa County Commissioner Steve Acquafresca. “Yet the federal government exempts themselves from that.”

PILT, like hundreds of other line items in the voluminous federal budget, has a history of being tucked into various funding measures over the years.

Created in the 1970s, it was funded through the regular appropriations process on Capitol Hill until 2008. Then it was stuck in the Troubled Asset Relief Program bill for five years. Last year, it was tucked in transportation funding.

Last week’s budget, passed by both the U.S. House of Representatives and the U.S. Senate, failed to include PILT funding.

“I’m very disturbed … that the decision was made to zero it out,” said Rep. Scott Tipton, a Republican whose 3rd District gets more of these federal dollars than anywhere else in Colorado and who voted against the budget package. “We’re concerned on the impact primarily on our communities. … This is a real challenge. When a hiker gets lost on federal land, the federal government doesn’t help — it’s going to be the local sheriff.”

The federal government owns roughly 75 percent of Mesa County’s land. The county’s 146,000 denizens live on the remaining fourth, mostly in Grand Junction and Fruita.

Yet Acquafresca points out that county officials are in charge of all the land — including road access, emergency service and law enforcement.

The county received $3.12 million last year from the federal government. The money accounts for about 5 percent of the county’s overall budget. Mesa gets more of the federal money than any other county in Colorado.

Acquafresca and his commissioner colleagues have budgeted this year for the federal dollars and says he doesn’t know what they’ll do if the money doesn’t come through in June.

“We don’t provide frivolous services,” he said. “Everything we do in this community is vital.”

Tipton, who is in Colorado this week on a congressional recess with the other members, said GOP leadership assured him they would try to get PILT funding restored in the Farm Bill.

Sen. Michael Bennet, a Democrat, who was on the Western Slope this week hearing from county commissioners on the matter, is making the same push from his position on the Farm Bill conference committee.

“It’s very, very important to the operating budgets to counties all over Colorado, vitally important to first responders and schools. That’s the message I heard loud and clear,” Bennet said.

La Plata County Commissioner Julie Westendorff said the $607,959 her county received last year helped fund rescue efforts and emergency services in the bountiful, heavily traversed mountains near Durango.

You can check out the comments too, but some of them devolve pretty quickly to partisan name-calling (another one says that search and rescue is reimbursed and not really an issue).

24 Comments

  1. This is not an issue found only in Colorado. Here in Oregon, some of the timber counties have been receiving funding from the feds for the last dozen+ years. That funding was scheduled to sunset, yet the counties apparently assumed the feds would simply extend the funding or start cutting timber again, presumably at or above the previous volume and they would be funded for all time to come. Along the way, many of the counties kept property taxes at minimal levels and did little to nothing to stimulate revenue in anticipation of the cut off date for fed funding. The folks in some of those counties have repeatedly voted down levies to fund basic services and place the blame for their plight on the shoulders of the fed and/or the environmental movement, while paying property taxes at levels not seen in other counties since the 70’s. Meanwhile, timber companies in these counties harvest from private land and ship raw logs overseas, obviously producing very little county revenue and very few local jobs. A large mill closed down in one such county and acres upon acres of raw logs make their way to port. Possibly the debate should center around how to make the timber industry and the timber counties stop being reliant on the federal dole…without destroying what’s left of the state…and pulling the load for themselves.

  2. Pingback: Rural counties scramble at loss of federal dollars | Not Without a Fight!

  3. Perhaps the finger needs to be pointed in the direction it belongs: the Tea Party. PILT was in the President’s Budget proposal for 2014. Republicans in the House took it out of the budget proposal.

    If you elect “deficit hawk” budget-slashers to Congress, don’t be surprised when the budget they slash is the one you depend on.

  4. I think it’s fair to ask the federal government to pay for its own services, either directly (by staffing up) or by reimbursing other governments that provide them. (However, the number of school children living on national forest land is pretty small.)

  5. I have no kids in school but I pay property taxes which fund schools…that’s the way it works. In my county and all others, the federal government holds land. Some of that may be forest land or it may be park land or office buildings. They don’t pay property taxes. They distribute federal funds by providing disaster services, national security and a host of other services. When a county depends on an industry for it’s “livelihood” and that industry struggles for whatever reason, the federal government is not obligated to pick up the slack. In the case of the timber counties, they did in fact take up the slack for more than a decade. The counties simply waited for the problem to go away on it’s own and it didn’t happen. In my opinion, the federal government should not simply pull the plug on people struggling in the timber counties, however there needs to be a point in time at which the counties are weened as a result of the county’s taking responsibility for themselves and moving on.

  6. When the federal government owns most of the land in a county they have a obligation to at least make PILT. All other landowners not only pay property taxes, personal taxes, but often create economy.
    The federal lands use to not only make payments to counties, but also create economy.
    Now they do very little of either. I do not think you can expect a county to be able to create a economy without the help the their largest landowner, sometimes up to 70% of the land. What kind of sustainable economy can we create on only 30% of the land base, when in rural counties the economy come from the land?
    You cannot also expect the few landowners in these counties to raise their tax rates when they have no economy to pay for them.
    Seems like someone is always wanting to blame log exports for “timber problems” in rural counties. Actually log exports are just a small percentage of what is harvested. Federal, state and tribal timber are never exported, nor is most of the private timber harvested.
    If you feel really strongly about log exports all you have to do is start a wood manufacturing plant and pay more than the exporters are (logs go to the highest bidder) and you can buy all those logs and create jobs here yourself.

    • And Bob, don’t forget that PILT affects counties where timber isn’t an issue. Where there is timber on federal land, If you are a large landowner and you won’t pay taxes and you also won’t let local people use the resources for economic gain… as Ron Roizen pointed out, that wasn’t the deal that was struck when the federal lands were established.

      • Sharon, Who is the “You” referring to in your comment here?

        “If you are a large landowner and you won’t pay taxes and you also won’t let local people use the resources for economic gain….”

        I hope it’s not directed broadly at The Government. Or at Dems. Or at Environmentalists. As Travis correctly pointed out above:

        PILT was in the President’s Budget proposal for 2014. Republicans in the House took it out of the budget proposal.

        Thank you, Tea Party.

        • From the National Association of Counties, no less. Go to Page 64/65:

          President’s 2014 budget proposes to extend mandatory funding for PILT at $410 million, an increase of $8.8 million from FY 2013.

          The Presidents FY 2014 budget also proposes an independent public evaluation of PILT to review the program, in both concept and practice, with a goal of developing options to put the program on a sustainable long-term funding path.

          So much for all this borderline “rural genocide” talk centered around Obama and the Dems, eh?

        • From GP as quoted in Ron Roizen’s post here...on NWAF!

          Regarding the loss of county property tax revenues, Pinchot painted a rosy picture of greater benefit in return for this seeming deprivation. “What happens to county taxes?” he asked rhetorically. His reassuring reply merits full quotation:

          People who are unfamiliar with the laws about National Forests 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 per cent 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. Congress saw that the money returns would soon be large, and it provided that the amount paid should not exceed 40 per cent of the counties’ tax receipts from other sources.

          Taxes from private timber lands, on the other hand, are ordinarily only temporary returns, because after the lands are logged they are usually left to burn up and become vacant and barren, quite valueless for purposes of taxation. Thus a county which is partly covered by a National Forest is better off than one which is not. In 1906 the National Forests paid the county school and road funds over $75,000. This amount will be almost doubled this year.

    • What percent of private harvest in Oregon is exported as raw logs? Yes, there are no exports from federal lands but as we know, federal harvest is small there.

      I had read that 50% of private harvest has been exported as logs. Can you give us a reliable number.? It goes up and down, but how has it looked over time?

      • The folks at PNW keep track of this.. here is last quarter..

        http://www.fs.fed.us/pnw/news/2013/11/lumber-log-exports.shtml

        The mysteries of Googling also yielded this policy paper by Dave Cleaves from 1981 (!) who is now the FS Climate Czar. http://ir.library.oregonstate.edu/xmlui/bitstream/handle/1957/23693/EMNO8461.pdf?sequence=1

        And this 2011 op-ed by Jerry Crane:
        http://www.oregonlive.com/opinion/index.ssf/2011/08/oregon_and_washington_log_expo.html

        With log export restrictions in place, Russia and Canada are now exporting nearly 15 times more finished lumber to China than they were 10 years ago, two or three times more than just two years ago. In 2001 China was importing about 250,000 cubic meters of lumber from Russia and similar amounts from Canada and the U.S. In 2010 China imported about 3,800,000 cubic meters of lumber from Russia, 3,500,000 from Canada but just 250,000 from the U.S. We are still exporting logs!

        Alexander Putin announced, with the introduction of Russia’s log export tariffs, that Russia’s goal is to stop the export of logs completely in favor of domestic manufacturing. We should be so enlightened. If citizens, unemployed workers and that part of the forest products industry that depends on timber sales would act to raise public awareness and push our elected leaders hard enough, there is a chance that we could follow the Russian and Canadian examples. We should not just sit and watch a few exporting companies load logs and jobs for Asia.

        • thanks for that…

          Off topic regarding PILT but the question came up again of federal timber payments in Oregon.

          I offer that PILT is a very different issue than timber payments and those PILT payments are the bare minimum to be expected, Why rural republicans in congress would allow this necessary payment to die is beyond me. Talk about cutting off your own nose. As others have noted, Obama and dems had wanted to increase the payments.

          Downloads here in Hanoi are slow and unreliable so could not get at the PNW station report yet for solid and reliable numbers but….

          Here is a rather heated November piece on exports,but as a quickie glance, it says that 1/3 of oregon harvest is exported as logs or chips.

          http://www.registerguard.com/rg/opinion/30735204-78/log-exports-forest-oregon-forests.html.csp

          here is the text which is hot n spicy, as always from Roy.

          Outsourcing timber costs thousands of jobs

          By Roy Keene

          Paul Barnum’s guest viewpoint in the Nov. 10 Register-Guard, “Timber sector down but not out,” ignores the elephant in the room: log exports.

          Log and chip exports, constituting a third of Oregon’s annual timber harvest, are outsourcing over a billion board feet of wood and thousands of domestic manufacturing jobs. Yet Barnum fails to even mention exports, let alone account for the losses. As director of the Oregon Forest Resources Institute, he also fails to disclose his employer’s mission and funding source.

          OFRI’s legislated mission is to “Enhance and provide support for Oregon’s forest products industry.” Funded with forest harvest taxes, OFRI benefits from increased logging regardless of whether the logs are processed domestically. Does Barnum’s analysis omit log exports to “enhance” and “support” the region’s largest corporate forest owners?

          As a panelist at a town hall meeting in Newport, I explored the implications of increased log exports and a proposal to greatly expand export shipping from the Port of Newport. Similar to Coos Bay’s log and chip export expansion, this will require dredging Yaquina Bay and dramatically increasing log truck traffic in the city’s downtown. Jeopardizing projected growth in the tourism, service and health sectors to add a couple dozen jobs seems a poor trade for the larger public.

          Citizens were further ruffled to discover that between 2009 and 2012, the timber harvest increased 108 percent in Lincoln County while employment reportedly decreased. This disconnect is typical in counties dominated by industrial forests.

          Lane County, for example, where Weyerhaeuser is the largest private landowner and the region’s main log exporter, saw a 75 percent increase in the timber harvest from 2009 to 2012 and a concurrent 14 percent decrease in wood products manufacturing jobs.

          A fellow panelist and critic of escalating log and chip exports, Greg Pallesen, vice president of the Association of Western Pulp and Paper Workers, also connected the dots. He described the devastating effects on local workers and communities not only from log and chip exports, but from the relocation of entire plants overseas to capitalize on cheap labor and offshore tax breaks. They then “dump” wood products back to us at prices domestic manufacturers can’t compete with.

          Guess where these outsourced plants export logs and chips come from.

          Barnum challenges critics of Oregon’s forest industry to “take a fresh look.” Even non-critics recognize that log exports are escalating. Gordon Culbertson, manager of Forest2Market, notes increasing export demands, saying “Asian appetite for Northwest forest products strengthened in the second half of 2012 and looks strong moving into the New Year.” Such strengthening is ominous for those genuinely concerned with local jobs and forests.

          According to the U.S. Forest Service, Northwest log exports, led by Oregon, jumped 28 percent in the second quarter of 2013 compared to the first, totaling 540 million board feet. “Demand from China is the major reason for the increased log exports.” said Xiaoping Zhou, a research economist who compiled the data.

          Forest2Market further notes that “Russia’s market share, traditionally the largest supplier of Chinese logs, has continued to erode, leaving Chinese buyers to fill the shortage with deliveries from North America.”

          This is because Russia placed a 25 percent tariff on log exports to protect its domestic industry. When Russia was accepted into the World Trade Organization, it agreed to lower log tariffs to 15 percent. Even a 15 percent tariff helps domestic mills compete for logs and creates revenue to offset unemployment and the collateral damage to forests from increased logging.

          Burning trees for power looms as a further threat to our already beset forests. The Japanese government now subsidizes mills to burn wood chips as “clean” power. Sound familiar? Reflecting Japan’s growing aversion to nuclear power, the country’s wood chip demands are expanding.

          A newspaper article by Takeshi Owada, “Paper makers seeing profit potential in biomass power industry,” notes that “As increased numbers of manufacturers enter the biomass power generation industry, they will face shortages. Chips from their own forests will be insufficient to ensure stable power generation, requiring purchasing supplies from abroad.”

          A country that once exported mature timber from Oregon now wants chips from teenage trees — trees logged off federal lands as well as private.

          Oregon’s forests, less protected than those in Washington or California, are getting Third World treatment. Oregon’s legislators and institutes are not only failing to protect our forests, but condoning or proposing policies that will export more unfinished wood and jobs. One has to wonder whether, like Barum and the Oregon Forest Resources Institute, our legislators and institutes stand to be rewarded by their efforts to increase logging!

          Roy Keene is timberland broker and forest consultant in Eugene.

  7. Starving out the rural counties – those with lots of Federal acreage – has been the agenda of the radical environmentalists for a while….doesn’t anyone understand that? Destroy the timber industry and everyone will ultimately have to leave the small communities intruding on NFS lands and re-wilding will occur. Really – hasn’t anyone ever seen the “radioactive wolves” documentary which documents how even someplace like Chernobyl recovers?

    Yes, just kidding around, but I’ve seen worse conspiracy theories here before.

  8. Well, things have changed a bit since 1906. The federal government made a lot of promises back in those times that they either didn’t keep or the issues became very different from what they predicted. Making the case that the fed promised the people a steady income from timber sales at the beginning of the last century, so therefore they still should, just isn’t going to get a lot of play. The fact remains, counties with a large percentage of federal land need to find ways to broaden their horizons. The federal government needs to help, support and maybe mandate that. In that equation private timber lands need to figure in substantially. The air, water, roads and ports that support the private timber enterprises do not belong to the timber companies exclusively. An export tax on this resource would not be unfair and would certainly ease the suffering. Who knows, it might even keep some of that resource at home and keep the mills churning.

  9. Not many seem to be talking about compromises, instead, rolling out the extreme positions, which are unlikely to come to pass. I think that “compromise” is the worst of the three “C-words”, in some people’s minds. How profitable such compromises turn out to be depends on current, site-specific conditions, and not some arbitrary volume figure, dredged up from the last millennium.

    • Seems to me Larry, that President Obama’s 2014 budget proposed to extend mandatory funding for PILT at $410 million, an increase of $8.8 million from FY 2013. And GOP House members cut that by $410 million, to zero it out completely. Yep, that would be an “extreme position” and not an example of “compromise.”

  10. What I would like to see, at least in Western Oregon, is a change in the way the timber industry does business. It is not likely to initiate the change. Coos Bay, Oregon, so bitter about the “loss” of the timber industry exports logs. Everything the industrial forest’s can throw at them. What kind of taxes are paid to the state of Oregon? On the other hand, the tax burden on small forest owners is disproportionate. It only takes so many workers to cut, haul and load. Making something with that lumber on US soil would employ many people but lower taxes to the industry would go out the window. One of the biggest problems I see in the “timber communities” is that there is always a federal program that reduces the Industry need to re-tool its mills and amend it business plans. It really is time for less reliance on the federal government, however, that doesn’t equate with suspending the needs of fish, wildlife, clean water and cultural resources.

  11. The timber industry in Oregon is one of most modern and efficient in the world. That’s why they are constantly able to produce more wood products with fewer workers.
    If you want more jobs in the local communities you have to have access to a resource that will lend itself to smaller quantities of high value wood products, such as old growth, mixed species.
    To be able to compete manufacturing a small diameter fir log takes a multi million dollar facility, of which Oregon has some of the best.

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