A Modest Proposal to Improve Forest Management: State Forest Block Grants

Commentary by H. Sterling Burnett

The United States Forest Service (USFS) is a lightning rod for both fiscal conservatives and liberal environmentalists, two groups not often on the same side of issues. Fiscal conservatives decry its money losing programs. Environmentalists claim that its programs cause environmental harm. Both sets of criticisms are correct. But because neither group trusts the other's motives, when either group proposes reforms that would streamline the USFS's operating procedures, alter its goals or shift its budget priorities the other group stymies the effort. And year after year passes with no changes made to the failed policies.

Logging is the most criticized of the USFS's money-losing efforts - but it is not the biggest money loser. That distinction goes to recreation. Hikers, birders and campers pay even less of their own way than loggers. Researchers at the Political Economy Research Center in Bozeman, Montana, found that while the timber program in 1988 made more than $5 million Forest Service Region 1, the recreation program lost almost $15 million. Neither program has made money since then. In 1992, the Region 1 timber program lost $18,967,660 and recreation lost $23,415,573 (25 percent more than logging and five times more than the grazing program).

In contrast, state and county forests typically make money. For instance, from 1988 - 1992 while state forests in Montana made $13.3 million, Montana's 10 national forests lost $42 million. State forests yielded an average of $2.16 for every dollar spent; federal forests lost between $.09 and $.73 for every dollar spent.

Most of these losses were due to the much higher management costs for national forests. The average wages were comparable - $15.30 per hour for state forests versus $15.63 for national forests, but it took 11.6 hours of administration and management per 1000 board feet harvested on federal land versus 4.5 hours on state land.

The figures are similar for county forests in Minnesota. From 1990 -1993 the Superior National Forest lost $15.83 for every thousand board feet of timber logged, while St. Louis County forest lands in the same region made $8.44 on every thousand board feet of timber harvested.

The environment benefits from state management as well. Independent teams of experts in both Montana and Minnesota concluded that state foresters did a better job of protecting watersheds and waterways from the impacts of various activities than did federal forest managers.

In Montana 99 percent of the watersheds in state forests were protected from all impacts from logging, compared to 92 percent of watersheds on federal forests.

In Minnesota county lands had a 90 percent compliance rate with best management practices for protecting water quality, compared to 87 percent for national forests.

Federal forests had an 87 percent compliance rate.
State forests also have better annual growth rates than federal forests. In the Southwest-central region of Montana the state forests averaged 67 percent of their productive potential, while the Gallatin National Forest, where more trees are dying than growing, actually had a negative growth rate.

In theory, the better water quality and superior timber growth should give state forests greater biodiversity than federal forests.

With these facts in mind Congress could implement a demonstration project, allowing any state that has demonstrated both superior economic and environmental performance with its forests to take over the management of the national forests within its boundaries. Congress could give fixed but declining block grants to the participating states to help them manage the forests during the transition period.

Each state that undertook such control would have to be allowed to run the program a sufficient number of years to counteract years of federal mismanagement and demonstrate improved environmental quality. At the end of the time period, any state that showed both improved economic and environmental performance on federal forests would be granted those forests outright and federal payments would end. Federal forests that did not improve could revert to federal management and new management experiments could be tried.

State and county foresters in underperforming states faced with the prospect of additional revenues would have the incentive to improve the performance on their forests in an effort to win authority to manage federal lands. And USFS managers, faced with a loss of revenues and authority would have the incentive to improve performance in an effort to maintain control of what federal forests remain.

Several states have shown that the public can have the best of both worlds, forests that make a profit and that promote environmental quality. Armed with this knowledge, a courageous Congress could allow states to manage the federal forests within their borders. Wildlife and the U.S. taxpayer would owe these farsighted legislators a debt of gratitude.