Feds Should Modernize Payments to Forest Communities, Groups Say

Counties with large tracts of public lands depend on federal payments to help make up their property-tax revenue shortfall. A proposal to create a “National Resources Trust” would get these communities off the payment treadmill and onto firmer footing, says one of the fund’s proponents.

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Many rural counties containing U. S. Forest Service lands depend on federal revenue-sharing payments from commercial activities to pay for schools, roads, law enforcement and other public services. While that arrangement has historically encouraged aggressive timber harvest for lumber, new research and a push from rural conservation groups is pointing to a new approach that will stabilize county revenues.

“It’s not all about timber production anymore,” said Mark Haggerty, a researcher at Headwaters Economics who focuses on rural counties and their relationship with federal public lands and local economic development trends.

Haggerty spends much of his time comparing U. S. Forest Service Timber Cut and Sold Reports with Gross Receipts from Commercial Activities. “The first thing to point out on gross receipts is that this revenue earned by the Forest Service for activities on public lands. That’s what becomes the basis for the revenue-sharing payments back to local governments,” Haggerty said.

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Motor bikers get ready for a day of riding at Basalt Mountain in the White River National Forest. (Photo source: U.S. Forest Service via Flickr)

County governments and schools are paid by the federal government for the tax-exempt status of federal public lands within their boundaries. These payments often make up a significant portion of county and schools budgets, particularly in rural counties with extensive public land ownership.

“One of the biggest trends is recreation. Take a look at the White River National Forest in Colorado. They are at historic high revenue sharing payments right now,” Haggerty said.

The White River National Forest had $10,910,061 in recreation revenue in 2017, and only $19,146 in timber revenue. “Recreation is pretty important, but this is still narrowly prescribed because it’s industrial recreation. This is Vail Resorts paying the Forest Service. It’s an important trend,” Haggerty said.

The Bridger-Teton National Forest in Wyoming in Idaho saw similar numbers, with $2,016,654 in recreation receipts and $43,340 in gross revenue from timber. The Inyo National Forest in East-Central California earned $7,883,657 in recreation revenue and only $6,428 from timber sales.

Screenshot from Experience Inyo, a U.S. Forest Service video about Inyo National Forest. (Source: U.S. Forest Service)

Haggerty also said that the cut-and-sold data is informative. “I think it’s interesting when you think about revenue sharing and the value that goes back to rural communities, it’s not just about volume, it’s just as much about price,” Haggerty said.

The Nez-Perce Clearwater National Forest in Idaho is a case in point, according to Haggerty. “The volume was actually substantially higher after the [timber] value declined,” he said. “Just focusing on volume harvested isn’t enough. We have to understand the market forces, the value. If one of the goals of boosting volume is to boost county revenue sharing, it may not work.”

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If you think about rural economies based on timber today, Haggerty said, it can’t just be about volume of board feet harvested.

“I like to think about it as integrating forestry into your broader local economic development strategy. Think about the outcomes. What are you trying to produce in your forest? How can you leverage that in your other economic sectors? How can you make it part of your larger economic and recreation planning?”

Haggerty supports of a different approach to addressing the challenges of county payments from commercial activity revenue: creation of a National Resources Trust. The trust would stabilize payment and eliminate the challenge of annual appropriations through Congressional budgeting.

The trust “gets to the idea of using resources to generate wealth. And you can think about wealth in a variety of different ways, not just in the way of creating annual receipts to fund local governments. It could, in theory, if it were to pass, create a real opportunity for communities and federal land managers to work together to re-think the way we’re valuing public land resources, timing extractions, considering market prices, all of that,” Haggerty said.

The Natural Resources Trust concept was formalized last year into legislative language, the Forest Management for Rural Stability Act. Though bill did not gain approval in 2018, supporters expect Senators Wyden (D-OR) and Crapo (R-WY) to re-introduce the bill in 2019.

Moving away from the commercial timber harvest for county government revenue treadmill is also a goal shared by many rural organizations. The Rural Voices for Conservation Coalition (RVCC) is currently circulating an organizational sign-on letter calling for creation of a trust fund to support rural schools.

“Our goal is to stabilize rural county revenues through the trust fund,” said Tyson Bertone-Riggs, program director for RVCC. “There is often a tension between the stewardship activities that need to occur in the forest, management that would minimize wildfire risk, for instance, and the need to generate revenue through commercial timber harvests.

“We support a plan that takes the pressure off of county governments, stabilizes their revenue and allows local government to direct the Forest Service to do the right thing.”

Headwaters Economics’ Haggerty said an important change to the relationship between federal forests and rural county payments is about changing mandates. States don’t have as broad a mandate as federal agencies do.

“The way states manage land is usually pretty narrow. They don’t have multiple use mandates like the federal government does. The states, at least with respect to how they manage commercial activities with public resources, they’re much better at it. They charge market rates. They will time the extraction more appropriately. They’re not going to sell a bunch of leases during bust periods. They’re managing their lands fiscally on behalf of the public.”

“The federal government, because it doesn’t have the same mandate, and because it’s mandate is confused between a bunch of different things, it’s just really difficult for the public to demand that the public side of the equation is met. There’s nothing wrong with commercial activities on public lands. But the worst case scenario is that we allow the activities but we don’t demand any of the returns. And right now, we demand some returns, but very, very little.”

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