Investigating the Investigation: “Big Money Bought the Forests” I. What Story Would You Tell?

Some of  the photos in this OOPro story seem unusually dark. There also look to be many sticks in this barren industrial forest. Is that really a sapling?

As my professors used to say when I’d critique something… “if you’d written the paper, you could have done it your way.”  Even if we agree on facts, calculations, or projections, they don’t necessarily lead to only one possible narrative.  One of the things I like to do on TWS is to explore different ways of looking at the same facts. So let’s look at the OPB/Oregonian/Propublica piece titled Big Money Bought the Forests:Small Logging Communities are Paying the Price.

In this case, the numbers aren’t really “facts” but calculations. I’m not enough of an economist to dig in to how they were calculated, but  Here’s a link to a piece describing it.

I will say this, though. The tagline on the webpage is “A data investigation by OPB, The Oregonian/OregonLive and ProPublica  found that timber tax cuts have cost counties at least $3 billion in the past three decades”, but they also later explain, adding “Since then, the department estimates the total loss from forestland property taxes to be about $806 million.”  Since most states tax agricultural and forest land at lower rates, I’m not sure that adding this amount in is appropriate for this analysis, so I’ll call it “severance+.” Here’s Polk County’s explanation of the farm and forest deferrals.

I copied the analysis, and calculated a difference and a ratio of fed/severance+ losses for each county.  It would be appreciated if someone would check my figures. After a while of looking at them, I wondered if the differentials (between fed and severance+ losses) could be attributed to the proportion of federal to private land in each county.  I couldn’t find that, but I could find the % public land here. A problem with that data for our use here is that State land is also included.  Even so, there seems to be a high correlation between bad impacts to counties with lots of federal land from the fed payment loss, and bad impacts to counties with lots of private land from the severance+ tax loss. If someone has just the federal land %, I will fix the table.

You could conclude, as the authors did, that half the counties did just as badly from severance as they had from federal payment loss.

Half of the 18 counties in Oregon’s timber-dominant region lost more money from tax cuts on private forests than from the reduction of logging on federal lands, the investigation shows.

You could conclude that taken across counties, more was lost to Oregon counties from lost federal payments than from severance+.

You could conclude that some counties have had a really bad double whammy.  Douglas, Lane and Linn. It would have been interesting to interview people in those counties.

But I haven’t lived in Oregon for a long time, and never on the west side, so I’m hoping others will weigh in with other ideas and conclusions.

 

Estimated Revenue Losses in Oregon’s Western Counties Since 1991 Est Fed Payment Loss Est Severance+ Tax Loss Difference Ratio Fed/Sev %Public Land
Benton $51.7m $85.0m -$33m .60 24.4
Clackamas $252.4m $94.1 $158.3 2.68 54.5
Clatsop * $-334.7k $170m -$170.3 ? 29
Columbia $29.9m $135m -$105.1 .22 8
Coos $88.2m $208.9m -$120.7 .42 28.8
Curry $162.1m $63.8 $98.3 2.54 61.7
Douglas $968.7m $355.0m $613.7 2.72 52.2
Hood River $68.2m $13.7m $54.5 4.97 74.9
Jackson $414.6m $72.4m $342.2 5.72 52.1
Josephine $223.9m $21.1m $202.8 10.61 68
Lane $981.1m $368.4m $612.7 2.66 58.5
Lincoln $108.3m $122.1m $-13.8 .88 34.6
Linn $287.0m $189.6m $97.4 1.51 39.6
Marion $116.3m $51.8m $64.5 2.25 29.2
Polk $28.7m $106.0m -$77.3 .27 11.9
Tillamook $63.6m $72.1m -$8.5 .88 73
Washington $9.1m $93.4m -83.9 .10 14.8
Yamhill $25.3m $82.2m -56.9 .31 16.5
$1607.9

*Clatsop County’s federal payments are estimated to have increased slightly since 1991.

10 thoughts on “Investigating the Investigation: “Big Money Bought the Forests” I. What Story Would You Tell?”

    • Thanks, Mac! You have to add up the forests to get the total by county, which is OK, but I wonder whether it makes sense to add BLM acres.

      Reply
  1. How did you calculate revenue loss from federal lands?
    Did you include all the safety net and SRS payments that are not directly coupled to timber sales? These payments to local govt tend to vastly exceed the flow of economic benefits from private forest land. And they have lasted quite a while.

    When Wyden and Craig first set up the safety net payments they were a huge windfall to counties because they used a highly inflated baseline, based on a period when the feds were selling both the current timber sales they were preparing, plus selling a huge amount of additional shelf-stock leftover from the timber buyback during the 80’s recession.

    This inflated baseline persisted beyond the “safety net” period into the “SRS period” though the windfall did get slightly ramped-down a couple times as shown here: https://oregoneconomicanalysis.files.wordpress.com/2012/01/woodproducts_timberpayments.jpg?w=768&h=548

    Reply
  2. So the point behind the OPB article seems to be, that the lose of revenue from changes to taxes on forest land is greater than the loses caused by the lost of revenue from stopping most logging on federal lands. As if that makes the lost of revenue from federal lands ok.
    Well I don’t think so. How about instead of comparing the loses of revenue, we add them together to give an idea of the economic hardships our rural communities are facing.

    Reply
  3. Here’s a good backgrounder of Oregon forestland taxes, presented by Peter Daugherty, State Forester, to the state’s House Natural Resources Committee on March 26, 2019.

    https://olis.leg.state.or.us/liz/2019R1/Downloads/CommitteeMeetingDocument/179316

    An excerpt:

    Designed to keep forestland as forestland
    “Most property in Oregon is valued and taxed based on real market value (RMV) –the price for which land would sell on the open market. As urban areas encroach on lands capable of growing valuable timber, the value of that timberland increases. This raises property taxes on the timberland, making it more expensive to hold while the timber is growing.

    :Recognizing this, the Oregon Legislature has established several special assessment programs that reduce taxes for forestland owners who manage their property for the primary purpose of growing and harvest timber.” –ODR 150-441-649″

    Reply
    • I didn’t check all other states, but Cal and Wash also have reduced tax rates for forest land in timber production.

      Reply
      • This is for Washington State:

        In order to support the development and preservation of forest lands, the legislature created two property tax deferral programs designed to help taxpayers who wish to grow timber for commercial purposes; the Designated Forest Lands program and the Open Space Timber Land program. The Designated Forest Lands program is governed by state statute (RCW 84.33) and managed by the Assessor’s Office.

        Through participation in the Designated Forest Lands program, Washington State encourages sound forestry practices so that present and future generations can enjoy the many benefits they provide. As a way to encourage commercial forestry in Washington State, landowners may apply to have their land classified as Designated Forest Land. Property owners that apply and are accepted into the Designated Forest Lands program have their lands valued at their current use rather than at their highest and best use for property tax purposes. This designation often results in a lower assessed value and lower taxes.

        https://www.clark.wa.gov/assessor/designated-forest-lands-program

        Through participation in the Open Space Timber Land program, Washington State encourages sound forestry practices so that present and future generations can enjoy the many benefits they provide. As a way to encourage commercial forestry in Washington State, landowners may apply to have their land classified as Open Space Timber Land. Property owners that apply and are accepted into the Open Space Timber Land program have their lands valued at their current use rather than at their highest and best use for property tax purposes. This designation often results in a lower assessed value and lower taxes.

        https://www.clark.wa.gov/assessor/open-space-timber-lands-program

        Reply

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