Bosworth on Payments to Counties

Douglas fir trees await processing at the Pacific Lumber Co. plant in Scotia, Calif. (Ben Margot / AP Photo / June 15, 2005) (Note from Sharon-the Times used this photo; I will replace with more recent California mill photo is anyone has one).

From the LA Times here.

By Dale Bosworth

December 18, 2011

During my long career with the U.S. Forest Service, people frequently expressed their concerns about the management of public lands to me when I’d run into them at the grocery store or on a hiking trail. One of the main issues they brought up had to do with the relationship between timber harvests and county budgets.

Here’s the dilemma. Counties traditionally rely on property taxes to fund basic services and education. But local governments cannot tax national forest land, and many Western states have a high percentage of their land in federal ownership. In Idaho, for example, about 63% of the land is owned by the federal government (as compared with, say, New York, where less than 1% of land is in federal hands).

To help compensate local governments for that loss of tax revenue, the Forest Service for decades returned 25% of the money it made from harvesting timber to the county government where the logging occurred. But that was problematic too because revenues were prone to wide swings depending on how much timber was harvested and what price it brought.

To address the uncertainty, Congress in 2000 passed the Secure Rural Schools and Community Self-Determination Act, which guaranteed revenues to counties based on past timber receipts. The act also introduced new goals of funding restoration and stewardship projects on public lands to help communities improve forest health and diversify their economies. In 2008, funding was extended through 2011 and some revisions were made to the law.

Next year, unless the program is renewed, the payment system will revert to the old method, in which counties receive 25% of timber revenues. This formula would return uncertainty and drastically reduce payments to counties at a time when rural America is already struggling.

A working paper put out last month by the Oregon State University Rural Studies program estimated that Oregon (with about half of its land owned by the federal government) stands to lose about 4,000 jobs and would have to make deep cuts in school funding unless the bill is reauthorized. And Oregon is just one of many states affected.

Instead of allowing the program to end, the act should be renewed, and Congress should take the opportunity to better align payment incentives with current economic realities and forest health goals.

Unfortunately, current proposals from the Obama administration, the House and the Senate all fall short. The president’s 2012 budget, for example, proposes to phase out the payments over two to five years, with no clarity for how the federal government will assist counties with large amounts of public land going forward.

In addition, the administration proposal would, for the first time, fund the payments directly from the Forest Service budget, a budget already stressed by deep cuts. Subjecting the county reimbursements to the annual appropriations process rather than setting up a multiyear reauthorization would make it difficult for many counties to provide basic services.

In the House, a draft bill proposes a timber-only approach in which logging would pay for all future federal payments to counties. This would be accomplished largely by rolling back environmental laws and abandoning collaborative efforts. Even if this bill could pass, it would require unsustainable logging levels to maintain payment levels, and it would require more federal spending than current appropriations.

In the Senate, a draft bill proposes continuing the current payment system at a reduced level for five years, but that only kicks long-term reform down the road.

There is still time before the payments end in mid-2012 to pass legislation that ties future county payments to achievable forest management goals and provides real economic options for counties.

One promising idea would be to deliver payments to counties based on economic need, so that payments are targeted to ensure the best use of taxpayer dollars. Another would be to link funding to efforts by counties to improve ecosystems and recreation opportunities on federal lands.

Although logging alone cannot lift rural economies, logging combined with forest and watershed restoration work — a timber-plus jobs bill — could be the basis for both funding and job growth in counties.

Dale Bosworth worked for the U.S. Forest Service for 41 years, and served as its chief from 2001 to 2007.

3 thoughts on “Bosworth on Payments to Counties”

  1. Our local counties in Idaho are well aware of the expiration of the Secure Rural Schools and Community Self Determination Act. They are concerned with the projected reduced revenue from the 25% funding. One part of the 25% funding that is often overlooked is it is based on receipts, primarily timber but does include other receipts such as recreation and range. The type of contract does make a difference in the receipts. The old traditional timber sales had 25% of gross receipts and road work were paid for by purchaser credits, so the 25% was based on the timber receipts before road costs were taken out. The new stewardship type contracts attempt to pay for as much as possible with timber receipts within the contract so little if any receipts are realized. One of our local counties requested that an up and coming collaborative restoration project have the timber harvest contract separate from the other activities, in order to realize the maximum receipts for the 25% fund. It also seems to me that to be politically correct the FS it is designing projects not to make a profit.

  2. Michael D’s comments are well-taken.

    Analogously, in the early 1970s, counties complained that the Forest Service was shorting them of their 25% by spending timber revenues on reforestation and other sale area improvements, financed by the Knutson-Vandenberg Act, leaving little sale revenue from which the 25% was calculated. Congress responded by including K-V spending as a part of the 25% formula. The net effect is that low-value sales required the Treasury to pick up the 25% payment because the Forest Service spent the timber payments on K-V projects.

  3. This is a very interesting discussion, especially as it relates to the increasing use and/or interest in stewardship contracting. With declining budgets, it seems there is a growing list of expenses that the agency and others are looking to timber receipts to cover. while at the same time, timber receipts are also declining due to declining harvest levels, poor markets and lack of a social consensus.

    A number of years ago I spoke with a fellow from Ochoco Lumber who told me how the FS, county officials and a local collaborative group had come to an agreement to send 25% of the receipts from all Stewardship Contracts to the county before reinvesting it into other projects on the forest. I wonder if this wouldn’t provide a workable solution by providing support to counties while continuing to benefit local utilize stewardship authorities.


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