USFS To Take Back SRS Funds

You’ll probably see this in tomorrow’s papers — especially here in Oregon, which stands to lose $4 million.

Forest Service taking back federal funds from 22 states

By Associated Press, Updated: Thursday, August 22, 2:42 PM

JUNEAU, Alaska — The U.S. Forest Service plans to take a portion of the timber payments it has promised or paid out to 22 states, citing federal budget cuts.

Collection letters from Forest Service Chief Thomas Tidwell went out to governors around the country Monday, saying money would be taken from funds used for habitat improvement and other national forest-related projects that put people to work under the Secure Rural Schools and Community Self-Determination Act.

Oregon stands to lose the most in the move, with nearly $4 million in reductions. That would leave the state with about $3.4 million under that program.

California would lose nearly $2.2 million, leaving it with about $1 million for the program. Idaho is set to lose $1.7 million, Montana nearly $1.3 million and Alaska, about $930,000 — nearly half the total allotment it had been expecting.

Earlier this year, Tidwell sent letters to 41 states, asking for the return of $17.9 million in timber payments used to pay for schools, roads, search and rescue operations in rural counties and conservation projects.

“We regret having to take this action, but we have no alternative under sequestration,” Tidwell said in his letter to Alaska Gov. Sean Parnell, dated March 19.

Alaska was given the option of having about $826,000 the state had received or expected under the act reduced from its so-called “Title II funds,” for habitat improvement and other projects, or getting a bill for the money that had already been paid out under other sections of the act. Parnell refused, saying there was no basis in law for the request.

It wasn’t immediately clear why the agency was taking a greater share of funds from Alaska now.

Parnell spokeswoman Sharon Leighow said by email that the state will be exploring all options to address the agency’s actions, “as an individual state and in concert with other states.”

The Western Governors’ Association, in a letter to U.S. Agriculture Secretary Tom Vilsack in May, said the budget act that triggered the automatic federal budget cuts, known as sequestration, does not include language authorizing “retroactive application of the spending reductions or limitations. Nor does it contain language requiring reimbursement of funds that were already distributed in order to satisfy spending limitations.”

The Forest Service falls under the Department of Agriculture.

The Associated Press reported Wednesday that the Forest Service was diverting $600 million from other areas to put toward wildland firefighting efforts.

Agency spokesman Larry Chambers said the Forest Service had been dealing with the issue of collections under the Secure Rural Schools act since March, “well before any decision was made regarding transfer of fire funds.”


11 thoughts on “USFS To Take Back SRS Funds”

  1. Ahhh.. but will the governors be compliant, sounds like they haven’t been so far..maybe some Governors need to take Vilsack to the (wood)shed.

  2. Do the governors actually have control over the funds? Or is the money still in the hands of the USFS? If the latter — and that’s what it sounds like — then the governors may have little recourse.

    “…money would be taken from funds used for habitat improvement and other national forest-related projects that put people to work under the Secure Rural Schools and Community Self-Determination Act.”

    • Secure Rural Schools funds are distributed to counties via three titles. Title I (payments to fund county roads and schools) and III (payments to fund wildfire preparedness plans and emergency services) are paid directly to the states for distribution to the counties. Title II (funding for special projects on public lands) are allocated by the agency directly to project applicants which are selected by a Resource Advisory Council (RAC).

      Because sequestration happened in the middle of the fiscal year, payments under Titles I and III had already been made to states, whereas most Title II funds were still held by the agency due to the longer process involved in project selection by a RAC, contract administration, and agreement preparations. States were contacted by the agency after sequestration to return the amount cut from their Title I and III funds, or they could elect to use the yet-to-be-spent Title II funds to cover those cuts. If states did not respond, or did not make an election, then they were recently sent that collection letter, usually with a bill for the return of the sequester cuts from Title I and III, minus any funds the agency still held in Title II. In most cases, Title I and III funds exceed Title II funds.

      • Marek, thanks for the helpful clarification:

        My point was “we have given you some bucks, we’re sucking it up due to sequestration and can’t give you any more, but we can give you the flexibility to move it around among the titles…”

        Comes across differently than “we gave you the money and we need you to give it back.”

        So is it really more of 1 than 2? perhaps not communicated in the most respectul way?

  3. The real background to this story in Oregon is that the largest private landowners in the timber counties pay almost no taxes.

    They used to pay property taxes on the regular value of their holdings, as well as severance taxes.

    But those were gradually wound down, incrementally so it was hard for the public to notice. At the same time, some of the same public officials involved in rescinding those normal taxes raised hue and cry about the loss of federal payments.

    The value of permanent big timber tax exemptions amounts to hundreds of millions of dollars a year, statewide, by official State of Oregon calculations.

    If big timber paid a reasonable share of taxes, the timber county governments would be in darn good financial shape.

    Behind the timber curtain, the free ride for big timber is never discussed in major media.

    Yet $4 million, due to the anti-government sequester, gets a big headline run.

    • Kevin, Thank you so much for once again providing important context and information to discussions on this blog.

      Your point here: “They used to pay property taxes on the regular value of their holdings, as well as severance taxes. But those were gradually wound down, incrementally so it was hard for the public to notice.”

      Reminds me of the same basic situation here in Montana with the “Business Equipment Tax,” which the logging companies, coal mining companies, construction companies, etc never much cared for. When I first moved to Montana in 1996 the Business Equipment Tax was 15%. Over the course of the next 17 years the BET was “gradually wound down, incrementally so it was hard for the public to notice” by our Montana state legislature, which (thank goodness) only meets every other year. Anyway, the BET in Montana is now at ZERO and the big companies with all that big equipment are certainly celebrating, even as our roadways take a beating. Of course, someone else is left to pick up the tab. Wonder who that would be?

    • Kevin

      Along with some other posts here. I am beginning to have my doubts about Oregon. I used to think that it excessively leaned to excessive environmentalism but I am not so sure any more.

    • Kevin, we discussed this earlier here

      My questions, since then, have been that as any corporation large land owning timber companies must pay all kinds of taxes… but you must be talking about property taxes, and you don’t think severance taxes are high enough and you think they should go to the general treasury? I think going for forest related things makes a lot of sense.

      It sounded like one of the reasons, on the state web site, for tax reductions was to help keep private lands in working forests, so it won’t be subdivided (and ergo, the State and us federal taxpayers have to pay to defend property in fires). So don’t you think that’s relevant?

      How about agricultural land? Should they pay property tax at a reduced rate? Why should forest companies pay more than farmers?

  4. I agree that the large timber land companies get a pretty good deal in Oregon. But they are still the largest taxpayers in most counties where they are located. You must understand that it is easy to say big timber gets a free ride because that is hardly the case. Plus who really owns these lagre forest land companies, maybe its your pension fund.
    But that is just a distraction from the real issue here. The federal government owns up to 70% of the land base in some of these counties and they pay no taxes and since the Northwest Forest plan they also create very little economy. I think it is only reasonble to expect them to pay something. This also brings us to the O&C issue where these lands were suppose to be managed for the benifit of the local counties.
    I really think you really need to live in rural Oregon to realize the devastation the Northwest Plan has cause.


    • Stump: You are exactly right. The federal government pays 0 taxes and these days create very few tax-paying jobs — and lots of taxpayer-dependent families and communities. That is the real problem, not industrial forestland taxes. The government is not keeping its promises and agreements to the states, counties, or rural families. The history is clear and can be easily documented.

  5. Stump and Bob Z, are you forgetting that the federal govt has been making “secure rural schools” FAR in excess of any property taxes they might owe. If the federal government paid taxes like the timber industry, it would be a minute fraction of the SRS payments.


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