Weekend Update: Timber County Payments

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Counties with Forest Service and federal Bureau of Land Management lands have been receiving federal payments in lieu of local property taxes for more than a century. But with the overwhelming concern over budget deficits, those payments maybe be vulnerable to cuts.

The current version of federal payments to counties with federal lands is the Secure Rural Schools and Community Self-Determination Act (SRS). That act will soon expire. This is a big deal to a very large number of counties in rural America, especially in the West.

A House subcommittee has released a draft of a new County Revenue Act. It is designed to increase commercial production of timber as a way of replacing the SRS payments. Counties would get a royalty off of timber sales.

Headwaters Economics, an irreplaceable group of western economists, has done an analysis of this proposal and finds that there would have to be an incredible increase in timber production to maintain current payments. And the cost of implementing the new program would be tremendous.

You can find the full report here.  Here is an excerpt:

The County Revenue Act requires that each National Forest meet Annual Revenue Requirements based on historic timber value produced over the period 1980 to 2000.  To achieve these mandated targets the County Revenue Act creates a new type of timber sale, “Revenue Trust Projects,” that will be exempt from certain environmental laws, cannot be appealed by the public, and will share75 percent of gross receipts with counties (current law shares 25 %).  

Current SRS appropriations are intended to achieve several policy goals, including creating jobs, improving forest health, and supporting county services.  Headwaters Economics has a longstanding interest in understanding county payments and what they mean for rural communities. 

Our analysis of the draft County Revenue Act finds: 

1. Based on current timber prices, annual timber cuts would have to increase dramatically—up to total cuts levels of 14.8 or 42.8 billion board feet—to maintain current county payments or to produce timber equivalent in value to historic averages.    

2. The cost of implementing the County Revenue Act would require significant new federal spending—from $1.8 billion to as much as $5.9 billion annually above current SRS appropriations—based on the current cost of preparing and administering timber sales.

3. The County Revenue Act would create winners and losers among counties compared to current county payments; for example, $61 million more would go to Oregon counties and $14 million less would go to New Mexico counties.

Just to be clear, in order to maintain current payments, timber production would have to be increased to levels well above current levels. And even then there would be large shifts in who would benefit. If you are an SRS county, you should read this report.

• There will be a “Living With Drought” conference in Blanco County, Texas, on Saturday, October 15th. The conference will be held at the First United Methodist Church in Johnson City.

Speakers will include Texas State Climatologist John Nielsen-Gammon.

For more details, contact George Barnette: [email protected]

• The decline in the stock market Thursday was part of a general drop in the value of stuff, including the kinds of commodities produced in rural America.

The Des Moines Register reports that on the same day stocks dropped, corn prices went down 35 cents per bushel and cattle fell the allowable limit of $3 per hundredweight in futures trading. Similar drops were experienced in soybeans. 

• Remember the Eastern Livestock Company? If you were one of the 700 cattle producers who received part of the $130 million in bad checks kited by the company you sure as heck do. 

Well, DTN’s Katie Micik reports that a federal and Kentucky grand jury handed down criminal indictments Thursday. Eastern’s owner and chief operating officer were each indicted on federal charges of mail fraud. Thomas Gibson and Steve McDonald turned themselves into authorities. The Kentucky grand jury indicted the two and two other directors on a total of 172 counts of theft and engaging in an organized criminal activity. 

• More than half  of those asked in a recent poll would support closing some post offices and two-thirds they would end Saturday mail deliveries. Nearly half of those polls said they used the U.S. Mail only once a month or less. 

• Nebraska’s governor, Dave Heineman, supports the giant Keystone XL pipieline but says it should be re-routed to avoid the Ogallala Aquifer. 

• Ken Ward Jr. writes that there is little notice of the ten year anniversary of the explosions that killed 13 coal miners at a Jim Walter Resources mine in Bookwood, Alabama, in 2001.  Disasters come and go and there is little change in the regulations that protect the lives of miners.

Ward wrote this last year about the Bookwood disaster, but it is just as true in 2011:

It’s worth remembering that the Bush administration’s response to Brookwood was to proceed to dismantle the regulatory safety net intended to protect our nation’s coal miners. Since then, we’ve seen not only Sago, Aracoma and Darby, but also Crandall Canyon and now, Upper Big Branch. Since that day in September 2001, 292 coal miners in the United States have died — and that doesn’t count the perhaps 10,000 who succumbed to black lung in the last decade.

 

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