NCPA - National Center for Policy Analysis


September 15, 2006

U.S. counties holding federal forestlands have historically received a share of the revenue generated by various management-related activities, including timber harvesting.  While technically not a property tax, revenue sharing placated the Western solons who feared nationalizing public domain lands would make community formation impossible, says Jim Petersen, founder of the non-profit Evergreen Foundation.

But recently the federal government has utilized whatever surrogates it could find as an excuse to stop harvesting timber from the public's forests, angering hundreds of small logging towns where it is the only source of revenue growth.

In an effort to placate the towns, Congress allocated $500 million in "safety net" funding in 2000, to help all federal lands counties cover their budget shortfalls. But what is not addressed is that $500 million is miniscule compared to what's really been lost in recent years:

  • In 1991, 8.5 billion board feet of commercial timber was harvested from national forests.
  • That 8.5 billion generated $5.5 billion in local income, and another $325.5 million in shared harvest receipts and $831 million in federal income taxes.
  • The grand total is $6.656 billion, more than 13 times what counties now get in safety net funding.

Meanwhile, some very interesting ideas are making the rounds, says Petersen:

  • One politically unfeasible idea would have the federal government pay county property taxes on its holdings, just like private landowners do.
  • Another -- perhaps feasible -- would give different conservation groups responsibility for managing portions of the national forest system. In a decade or so the public could compare the results and decide which they like best.
  • Still another calls for the privatizing of the national forest system.

Source: Jim Petersen, "Lumber Pain," Wall Street Journal, September 14, 2006.

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