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Components of a Forest Conservation and Economic Transition Plan for the Pacific Northwest]
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2
FOREST POLICY CENTER
May 13, 1993
Katie McGinty
Director of Environmental Policy
The White House
1600 Pennsylvania Ave NW
Washington, DC 20500
Dear Katie:
Enclosed is a copy of the Forest Policy Center's recently-released discussion paper,
Components of A Forest Conservation and Economic Transition Assistance Plan for the Pacific
Northwest. This is not a "plan," but an analysis of several policy mechanisms that should be a
part of whatever plan is devised for the region.
If you have any comments, questions, or suggestions regarding this discussion paper,
please don't hesitate to give me a call at (202) 667-3300. If you would like to order additional
copies, please ask to speak with Susan Stedfast.
The Forest Policy Center is committed to assisting in every appropriate way in the
development of a workable solution to the situation in the Pacific Northwest, one that will
facilitate the evolution toward a regional economy that is ecologically sound, economically
viable, and socially responsible. We appreciate your efforts in that regard as well.
Sincerely,
Saupb
V. Alaric Sample
Director
1516 P STREET. NW WASHINGTON. DC 20005 (202)667-3300 FAX (202) 667-7751
A Program of the American Forestry Association
COMPONENTS OF A
FOREST CONSERVATION AND
ECONOMIC TRANSITION ASSISTANCE PLAN
FOR THE PACIFIC NORTHWEST
A Discussion Paper
FOREST POLICY CENTER
CONTENTS
Acknowledgements
ii
Introduction
1
Summary
2
Land Stewardship Contracts:
Opportunities for Ecosystem Management and Employment
4
Stewardship Contracting East of the Cascades
to Mitigate Timber Supply and Employment Effects
of Spotted Owl Habitat Protection
11
Compensating for impacts on federal payments to counties
19
Private Land Relationships
in Forest Ecosystem Management
27
Interactive Use of GIS Technology
to Prioritize Late-Successional Forests of
Greatest Ecological Value
34
Elimination of Log Export Subsidies:
Effects on Timber Supply and Employment
39
Appendix A:
Federal payments to counties in Washington and Oregon, 1974-1992, with projections
to 2002 based on a ten-year rolling average (by total payments and per-acre
equivalent).
45
i
Acknowledgements
A number of individuals contributed important data and ideas to this discussion paper, and
helped us in our efforts to provide the most complete, accurate, and balance information and
analysis that could be provided within the time available. The Forest Policy Center would like
to express a special thanks to Richard Haynes, Chad Oliver, Dave Perry, Bruce Lippke, Jim
Geisinger, Chris West, Ron Kaufman, Mike Kerrick, John McMahon, Kass Green, Ken Osborn,
Kay Berg, Don Flora, Ross Gorte, Tom Wescott, Tom Tuchmann, and Dennis Le Master.
Among AMERICAN FORESTS and Forest Policy Center staff and board members who contributed
to the paper are Neil Sampson, Zane Smith, Gerry Gray, Perry Hagenstein, Lance Clark, and
Susan Stedfast. The views expressed are the author's and do not necessarily reflect those of the
contributors.
V. Alaric Sample
May 12, 1993
ii
Forest Policy Center
Page 1
Introduction
On April 2, 1993 in Portland, Oregon, President Bill Clinton, Vice President Albert Gore
and the heads of the departments of Agriculture, Interior, Labor, Commerce, OMB and EPA gave
their undivided attention to listening to the people of the Pacific Northwest and trying to
understand the controversy over habitat protection for the threatened northern spotted owl. Not
since the days of Theodore Roosevelt has a sitting president so dedicated his own time and that
of his senior Administration officials to an issue of forest conservation. In Roosevelt's day, the
talk was of sustained-yield forestry, and of halting the overexploitation of forest resources that
threatened the supply of timber for a rapidly expanding nation. In Clinton's day, the talk has
evolved to the protection and sustainable management of forest ecosystems, managing our forest
resources in a way that is simultaneously ecologically sound, economically viable, and socially
responsible.
Regionally, nationally, and internationally, conservation and economic interests that have
traditionally opposed one another have begun to recognize that a healthy environment and a
healthy economy are not mutually exclusive, but are mutually dependent. Over the long term,
it is not possible to sustain one without sustaining the other. In this new awareness, President
Clinton has challenged us all to begin crafting a balanced, workable solution to one of the most
difficult and seemingly intractable resource management issues of our time, and to create the
political consensus that will be crucial to its successful implementation.
Following the Forest Conference in Portland, President Clinton ordered federal officials
to develop a plan of action for his review by June 1, 1993 and articulated five key principles to
guide their work:
1.
Remain cognizant of the human and economic dimensions of the problem. Where sound
management policies can preserve the health of forest lands, timber sales will go forward;
where this requirement cannot be met, the plan must offer new economic opportunities
for year-round, high-wage, high-skill jobs.
2.
Protect the long-term health of our forests, wildlife, and waterways, holding them in trust
for future generations.
3.
Actions must be "scientifically sound, ecologically credible, and legally responsible."
4.
Produce "a predictable and sustainable level of timber sales and non-timber resources that
will not degrade or destroy the environment."
Forest Policy Center
Page 2
5.
Make the government work together, ending the gridlock within the federal government
through insistence on collaboration, not confrontation.
To accomplish this and develop the Administration plan, three "working groups" were
established:
An Ecosystem Management Assessment working group was established to "identify
management alternatives that attain the greatest economic and social contribution from
the forests of the region and meet the requirements of the applicable laws and regulations,
including the Endangered Species Act, the National Forest Management Act, the Federal
Land Policy and Management Act, and the National Environmental Policy Act."
A Labor and Community Assistance working group is to address the forests' role in
regional economic development and diversification, "accommodating properly functioning
markets and facilitating the transitions inevitable in the modern global economy." A
program to assist communities and displaced workers is to be developed not to dictate
preferred paths for economic development but to "build upon the independence and
strength of these communities and their residents and provide them with the tools needed
for economic revitalization based on their own needs and on potential new opportunities
in forest-related employment."
The charge for the Agency Coordination working group recognizes that interagency
coordination "becomes even more critical as we move toward an ecosystem approach to
forest management where a number of agencies must be involved in planning and
implementing a management strategy," and requires the development of a plan to improve
the working relationship among federal and state agencies in the region and eliminate
impediments that block coordinated action.
Summary
The following discussion paper offers a brief background and analysis of six key
components of a forest conservation and economic transition assistance plan for the Pacific
Northwest that is consistent with the principles articulated by President Clinton. AMERICAN
FORESTS and the Forest Policy Center strongly support the President's principles as consistent
with those that have guided our own organization's efforts in forest conservation since its
founding in 1874. To briefly summarize the major points of the discussion paper:
The use of land stewardship contracts in place of conventional timber sales offers
opportunities for accomplishing needed resource management and ecosystem restoration
activities, contributing as much as 3.2 billion board feet annually (for the next ten years)
to the Pacific Northwest timber supply, and generating as many as 52,000 jobs in forest
products and related employment. Work would be financed through a credit arrangement
and would not affect federal budget outlays.
Forest Policy Center
Page 3
Ecosystem restoration actions are needed east of the Cascades in the Blue Mountains and
in Northeastern Washington to reduce the risk of catastrophic wildfire, and to repair
watersheds and restore the natural dynamics and resiliency of fire-dependent forest
ecosystems. In the near term, these activities could generate more than 500 million
board feet of timber annually and support approximately 8,000 jobs in forest products
and related industries.
The expected decline in timber harvesting on federal lands will have a major impact on
federal revenue sharing with local governments, which is currently based on a portion
of federal timber receipts. Shifting to a formula based on federal land area in each
county, with payments based on a rolling ten-year average during a five-year
transition period, would fairly compensate local government for lost taxes due to tax-
exempt federal land ownership and provide a high level of income that is far more stable
and predictable than that based on cycling timber harvest levels and prices.
Private forest lands can play an important complementary role to public forest lands
in an ecosystem-based strategy to protect late-successional forest habitat for the spotted
owl as well as other species that might otherwise become threatened or endangered in the
future. It is important to identify and eliminate the disincentives that now exist for
closer cooperation with adjacent public and private forest landowners, without
undercutting the economic purposes for which private organizations and individuals own
and manage their forest land.
Income tax-based federal log export subsidies give foreign log buyers a competitive
advantage over domestic purchasers, requiring a domestic buyer to offer a price at least
7 percent higher in order for the log seller to receive the same after-tax income as selling
to a foreign buyer. Elimination of this subsidy could re-route approximately 250 million
board feet annually back to Pacific Northwest mills, sustaining at least 1,000 jobs that
otherwise would be lost. In addition, it would save an estimated $100 million annually
that the federal government could apply to economic transition assistance programs in the
Pacific Northwest.
Recent rapid advances in remote-sensing and geographic information systems (GIS)
technology have made possible the development of better ecological information on the
extent, location, and nature of old-growth forests than existed even when the "Gang of
Four" analysis was performed. Use of GIS technology and improved information in
a setting that allows open and direct interaction among scientists and stakeholders may
uncover alternatives that are as yet unknown and untried. This approach should be an
explicit part of the planning process, and sufficient funds and other resources should be
made available to ensure its success.
Forest Policy Center
Page 4
Land Stewardship Contracts:
Opportunities for Ecosystem Management and Employment
A new approach to timber sale contracting offers opportunities to accomplish needed
ecosystem management and ecological restoration activities in the Pacific Northwest, while at the
same time providing additional employment in the forest-products and related industries in local
communities. Land stewardship contracting fosters the integrated resource management approach
central to the purposes of the National Forest Management Act (NFMA) and the Federal Land
Policy and Management Act (FLPMA); such an approach is now even more important in order
to effectively and successfully implement forest ecosystem management policies on federal
lands.¹
For the purposes of the economic transition assistance plan for the Pacific Northwest
forests affected by the need to protect old-growth habitat, land stewardship contracting can
provide employment opportunities for woodsworkers in and around their own communities with
little or no retraining necessary. Financing this work from current income to the federal land
managing agencies can help minimize the impact of the economic transition assistance package
on the federal budget deficit.
Background
The FY 1992 and FY 1993 appropriations bills for the Forest Service directed the agency
to test a new approach to federal timber sale contracting on several western national forests. This
approach, termed "land stewardship contracting," authorized the Forest Service to "apply the
1
National Forest Management Act, 16 U.S.C. 1600; Federal Land Policy and Management
Act, 43 U.S.C. 1701.
Forest Policy Center
Page 5
value of a reasonable portion of the value of timber removed
as an offset against the cost
of stewardship services received including, but not limited to, site preparation, replanting,
silviculture programs, recreation, wildlife habitat enhancement, and other multiple-use
enhancements." The stewardship contracts were to be used "to help the private sector promote
the Forest Service ecosystem management initiative
[and] to give contractors an incentive
to become as concerned with sustaining ecosystems as with sustaining trees."³
In terms of procedure, this system would allow the Forest Service to contract for an array
of ecosystem management and ecological restoration services as part of a total land management
"package deal" with a single contractor. The contractor would be compensated for these services
by receiving credit toward the amount owed to the Forest Service for timber harvested as part
of the contract activities. This approach is essentially the same as the "purchaser credit" system
used for many years to compensate timber purchasers for road construction and maintenance
associated with a timber sale.⁴
The idea of land stewardship contracts has been well received by the Forest Service,
particularly at the field level where closer integration of all land management activities is seen
as a key not only to better resource management but greater program effectiveness and cost
efficiency. National forest plans, developed pursuant to NFMA, are developed using an
integrated resource management approach.
But integration is made difficult in the implementation of these plans by the function-by-
function organizational structure of the agency (timber, recreation, wildlife, range, etc.) and by
the disintegration of planned integrated resource management projects that takes place during
2
Congressional Record, Senate, September 13, 1991, p. 12973.
3
Ibid.
4
National Forest Roads and Trails Act, 16 U.S.C. §§ 532-538.
Forest Policy Center
Page 6
the annual budgeting and appropriations process.⁵ A 1988 GAO evaluation of a
Congressionally-authorized Forest Service pilot project testing an integrated "end-results"
approach to Forest Service appropriations found that program accomplishments for all resources
improved while overall costs were reduced. GAO observed further that this approach would help
the Forest Service carry out the forest plans mandated by Congress and would facilitate greater
agency accountability for appropriations.⁶ Despite this positive independent assessment,
Congress has not taken necessary action to expand end-results budgeting beyond the few national
forests that participated in the original pilot program.
Results to date of stewardship contract pilot study
Preliminary results of the land stewardship contracts pilot study have also been positive,
and in the Forest Service's FY 1993 appropriations the number of pilot forests was expanded to
include the Kaibab (AZ), Coconino (AZ), Dixie (NV), Idaho Panhandle (ID), and Lake Tahoe
(NV). Congress has asked the Forest Service to study how receiving services in lieu of revenue
would affect the agency's adherence to other laws relating to contracting and to revenue sharing
programs. Because services under land stewardship contracts would be credited against what
purchasers would normally pay for the timber they remove, Congress has been particularly
interested in how this would affect the 25 percent of Forest Service receipts that are normally
paid to counties in lieu of taxes.⁷ There was similar concern over the purchaser credit system
used for road construction, which was resolved by adding the value of the foregone timber
receipts to the amount on which the calculation of the 25 percent payment to counties is based.
5
Sample, V. Alaric, The Impact of the Federal Budget Process on National Forest
Planning (Westport, CT: Greenwood Press, 1990).
6
U.S. Controller General, Forest Service: Evaluation of "End-Results" Budgeting Test,
GAO/AFMD-88-45 (Washington, DC: U.S. General Accounting Office, 1988).
7
Twenty-Five Percent Fund Act of 1908, 16 U.S.C. 500.
Forest Policy Center
Page 7
Serious consideration should be given to developing a means other than payment of a
share of timber receipts to compensate local government for the tax-exempt status of federal
lands (see section on Compensating for Impacts on Federal Payments to Counties). This is just
one example of where the existing linkage between federal revenue sharing and timber harvest
levels on federal lands has become an impediment to land use and policy changes that are in the
public interest. Breaking this linkage and putting federal payments to counties on a land area
basis will give the counties a more even and reliable source of income and will take local
government out of the position of pressuring for unsustainably high timber harvest levels simply
to maintain income based on a portion of the receipts. This existing approach has been a
continuing restraint on the implementation of an integrated resource management approach on
federal forest lands as specified in NFMA and FLPMA. An ecosystem-based approach to forest
management requires an even higher level of integrated resource management. The formula for
compensating local government for lost property taxes should not, need not, and cannot continue
to be an obstacle to crucial changes in land and resource management on the federal lands.
For the purposes of the economic transition assistance plan for the Pacific Northwest
forests affected by the need to protect old-growth habitat, land stewardship contracting can
provide employment opportunities for woodsworkers in and around their own communities with
little or no retraining necessary. Forest management experts at the University of Washington and
Oregon State University have identified a substantial need for reforestation, thinning and other
silvicultural treatments that would produce a considerable volume of second-growth timber for
Pacific Northwest mills and provide significant employment opportunity for workers whose jobs
are threatened by the decline in old-growth timber harvesting.
Timber supply and employment effects of stewardship contract opportunities in the Pacific
Northwest
Many public and private forests west of the Cascades contain an overabundance of
established second-growth stands in need of actions such as thinning in order to grow to other
Forest Policy Center
Page 8
structures important for a diversity of habitats.⁸ In the absence of such actions neither managed
nor preserved forest areas are likely to achieve biodiversity goals. Managed areas will primarily
contain dense young stands that discourage both structural and species diversity. Geographically
isolated preserved areas will contain primarily old-growth until major natural disturbances occur,
after which the older structures will be lost for many years.9
The anticipated annual volume from thinning opportunities alone in western Oregon and
western Washington is estimated at more than 3.6 billion board feet (BBF) per year. In Oregon
alone, there are commercial thinning opportunities in stands 20-150 years old on public,
corporate, and non-industrial private lands that could generate a merchantable volume of more
than 3.2 BBF per year during the next ten years. 10 This conservative estimate assumes that less
than 60 percent of the stands that could be thinned would actually be thinned, and that 40 percent
or less of the volume will actually be removed for processing into wood products. In
Washington a similar conservative approach to estimating timber volumes from commercial
thinning just in stands 10-30 years old suggests that nearly 430 million board feet per year would
be available.¹¹
At the current estimate of 9.3 direct forest industry jobs per million board feet of timber
harvested, this could mean continued employment for nearly 33,480 timber workers now
threatened with layoffs. If indirect and induced employment is considered (an additional 5.7 jobs
8
Oliver, C. 1991. Thinning and pruning 10-30 year old plantations in western
Washington: Investment, social, wood supply, and environmental consequences. Report to
Governor's Timber Team, Timber Committee, State of Washington.
9
Oliver, C., Testimony before the House Committee on Agriculture, Subcommittee on
Forests, Family Farms, and Energy, March 11, 1992.
10 Perry, D., Oregon State University, personal communication, May 3, 1993. These
estimates are based on the International 1/4-inch log rule, which provides a more accurate
conversion of cubic foot volume to board feet for smaller diameter logs. Estimates based on the
Scribner log rule would be somewhat lower.
11 Oliver, C., University of Washington, personal communication, May 4, 1993.
Forest Policy Center
Page 9
per MMBF), this could translate to a total of as many as 54,000 jobs in Pacific Northwest
communities.
Financing stewardship contracts
Financing this work from current income to the federal land managing agencies can help
minimize the impact of the economic transition assistance package on the federal budget deficit.
Economic assistance will be needed by the people and communities of the Pacific Northwest
during this period of transition to a sustainable regional economy, with a healthy, stable forest
industry based on the management and utilization of second-growth forests. This assistance,
generally discussed in terms of loan guarantees and vocational training, is both appropriate and
necessary to moderate the effects of a major economic adjustment, particularly in rural
communities. Such programs are likely to require significant federal outlays at a time when
reducing the federal budget deficit is the foremost domestic policy priority of the Administration.
The inclusion of stewardship contracts as one component in an overall economic transition
assistance plan can efficiently reach the most heavily affected individuals and communities with
immediate employment opportunities with little or no direct federal outlay. The purchaser credit
program, used by the Forest Service to obtain road construction and maintenance services on
nearly every national forest in the country, provides one model for using timber receipts to offset
the cost of stewardship activities. The needed construction services are specified as an integral
part of a federal timber contract describing the volume and estimated value of the timber to be
sold. On most national forests, these integrated contracts are then sold in an open competitive
bidding process that assures the federal government of a fair market value for both the timber
sold and the services received.
Resource management and ecological restoration services could be provided either directly
by the contractor or by one of the many subcontractor firms, specializing in reforestation,
thinning operations, stream habitat improvement or other activity, that are likely to spring up in
response to new opportunities through stewardship contracting. Small and large timber purchaser
Forest Policy Center
Page 10
firms have already expressed an strong interest in bidding on stewardship contracts to perform
an array of resource management and ecological restoration activities to be specified by the
Forest Service. Stewardship contracts would be available and attractive to the very firms that
face declining prospects due to old-growth habitat protection, primarily in historically timber-
dependent, rural communities. The employment opportunities these contracts represent would
require little or no immediate retraining of woodsworkers, or relocation from their home
communities.
Accomplishing needed resource management and ecological restoration work through
stewardship contracts offers the prospect of significantly moderating the impact of old-growth
habitat protection at relatively low cost, targeting the employment benefits to rural communities
that need it most, when they need it, and using the existing skills of individuals most affected
by the habitat protection decision. Stewardship contracts deserve careful consideration as one
component of an overall economic transition assistance plan for the Pacific Northwest.
Forest Policy Center
Page 11
Stewardship Contracting East of the Cascades
to Mitigate Timber Supply and Employment Effects
of Spotted Owl Habitat Protection
In light of the reduced timber availability on the coastal Cascade public forests due to the
controversy over management of the remaining old growth, the loss of jobs in the region, the
high price of timber (even low-quality timber) throughout the west, and the need for forest
treatment in the inland forests, a five-year transition strategy could contain one element that
streamlined the process of instituting forest health projects in the inland forests, along with
incentives for coastal-area workers and companies to undertake the work involved.
Background
The coniferous forests lying east of the Cascade spine, and in the Sierra region of
California are, in many places, in serious need of effective management treatment. The forests
are very diverse, so generalizations should be avoided, but many sites occupied by Ponderosa
Pine, either alone or in combination with other conifers such as Western Larch, Douglas-fir, and
the true firs, show significant stress due to improper species balance and overpopulation of trees
per acre. Ecologists attribute this situation to a variety of causes, including removal of the high-
value and largest trees in early logging, a wet period in the first part of the 20th Century that
may have allowed moist-site species such as fir to invade sites normally more suited for pine
and larch, and aggressive fire protection in the past half-century that kept small trees and fire-
intolerant species from being "weeded out" of these forests.
As the trees have grown larger and more dense, a drought cycle in the past decade has
exacerbated moisture and nutrient stress in overcrowded stands. Opportunistic insect and disease
populations have soared, and large areas of dead and dying trees have resulted. In some stands,
this timber holds significant economic value if harvested within 1-3 years after mortality;
Forest Policy Center
Page 12
thereafter the economic value drops off rapidly. Allowed to remain on site, this dead timber
presents a huge fuel load which, if ignited, can result in uncontrollable wildfires that do major
ecosystem damage because of the abnormally intense heats generated.
Where these forest areas burn, a new even-aged management cycle must begin again,
often on soils and sites that have been degraded by the effects of intense fire. Where these
stands can be treated while a fair component of trees still remain alive, it is possible to begin a
new management system (now increasingly called ecosystem management) that focuses on ways
to retain the forests in healthy, dynamic, diverse conditions. Such treatments will provide jobs,
produce timber products, and restore forests to improved condition.
The needed treatment projects are not now being done, however. For example, the
Northeastern Washington National Forest Health Report says that, "on the three national forests
in northeastern Washington, about 2,980,000 acres are at risk of death from insects, disease and
wildfire. Salvage and green timber sales, thinning and related activities, and reforestation
programs deal with about 26,000 acres of susceptible lands annually under existing budgets."
Obviously, this 100-year+ rotation is not going to meet the forest health needs of those forests.
One reason seems to be the lack of both programs and budgets within the agencies for
effectively planning and implementing forest health-related treatments. The agencies rely heavily
on timber sales, both salvage sales after mortality and green sales of merchantable logs, as their
major silvicultural treatment device. This makes it difficult to plan and pay for the large amounts
of work needed that are not directly related to the removal of merchantable timber, because there
is no direct source of funds or program support to pay for such work. The emphasis on timber
sales has also generated great public skepticism which makes it difficult for resource managers
to propose other types of treatment without great public cynicism about it being a "clearcut in
disguise." That skepticism, particularly as it has resulted in cumbersome planning, review, and
timber sale processes, can extend the time and costs involved to the point where many projects
are infeasible.
Forest Policy Center
Page 13
In particular, clearcutting as a timber harvest method meets with high public opposition.
In some of these public forests, a significant amount of private timber has been clearcut in recent
years, and much of the landscape has been significantly affected. Additional clearcutting on the
interspersed public lands is both technically and politically questionable.
On some of the hardest-hit forest regions, such as the Blue Mountains of Eastern Oregon,
intensive ecosystem evaluations have been done and forest restoration plans prepared. Those
plans focus on restoring forest sites through a combination of practices designed specifically for
each condition, including:
Removal of salvageable dead timber;
Thinning of green stands where needed;
Pruning of dead or lower limbs where needed to reduce the risk of ground fires
climbing these "ladder fuels" into tree crowns, as well as to improve the ultimate
quality of the wood produced;
Prescribed burning to reduce excessive fuels, break up large areas of wildfire-
susceptible conditions, and create habitat diversity;
Removal or treatment of forest roads to reduce runoff, erosion, and sedimentation
of streams, or to reduce human access into critical wildlife habitat or use patterns;
Restoration of ecosystem structure in riparian zones; and,
Tree planting in unregenerated or understocked stands.
Other public forest areas, such as eastern Washington and northern California, are
currently undergoing similar study and plan preparation. Forests in Idaho have been most
seriously affected at the southern, drier end of the state. On the Boise National Forest, for
example, so much forest has been killed in recent years that all current timber sales are salvage
of dead timber, and the workload is so extreme that it has not been possible to begin preventative
work on stands that could be saved through effective treatment. Formal plans for treatment
project needs have not been prepared on the Idaho forests, however.
Forest Policy Center
Page 14
Forest Health Projects Versus Timber Sales
A major factor in this policy proposal would be to replace, for a five-year test and
transition period in the affected western forests, most or all of the normal timber sales with forest
health treatment projects. These projects, while they could produce large amounts of
merchantable timber, would be designed and implemented to achieve a more desirable forest
condition, and to help managers facilitate the transition to ecosystem management on these sites.
A stewardship contracting approach, as described in the previous section, could be used
to accomplish the necessary ecological restoration activities. The project plans would identify
the forest treatment work needing to be done, and establish a bid basis to set fair market prices
for carrying out the work. They would also estimate the type and amount of merchantable timber
or other material likely to be produced during the treatment work, and establish a bid basis to
set fair market prices for that material. A fair method of reimbursement, such as is currently
used for purchaser-credit road building in timber sales, should be established which assures fair
and equitable treatment for both the government and the contractor.
To remove the "spike" that these sales would put into payments to some counties during
this transition period, payments to the states and counties should be stabilized for the transition
period by taking a rolling average of the past 10 years of payments to each county, normalized
for inflation, and making that the annual payment for the transition period, regardless of volume
removed.
The contracts to implement these projects will almost certainly need to be multi-year in
length, with final approval and payment to the contractor based on achievement of the end results
agreed to in the stewardship contract. As opposed to straight sale of timber, these projects should
be heavily based on effective performance. Many tasks, such as prescribed burning, depend on
weather conditions that may or may not be available in a given year. Others, such as tree
planting or riparian area restoration, may take 2-3 seasons to judge whether or not they have
succeeded. Where it is in the contractor's financial interest for the project to succeed, as opposed
Forest Policy Center
Page 15
to simply "doing the work," it creates a significant difference in the type of performance, as well
as the oversight costs of the administering agency.
Implementing the Policy
An Administration proposal for a five-year program should include the following
elements:
Immediate funding to accelerate implementation of the Blue Mountains
Restoration Project;
Start-up funding to begin implementation of the Eastern Washington and Sierra
Forest Restoration Projects when plans have been completed and approved;
Funding to begin a forest health study and restoration proposal for Idaho public
forests, with an intense public participation process similar to the Blue Mountains
Restoration Study;
Streamlining the planning and implementation process by directing the agencies
to prepare NEPA documents and carry out public participation processes with
plans developed in sufficient detail at the landscape or ecosystem level to illustrate
the end-results objectives desired in each affected ecosystem, then allowing
project-level implementation of approved plans to proceed without further NEPA
review or appeal;
Approval for all national forests in Washington, Oregon, California, and Idaho to
utilize the multi-year stewardship contracting authority granted to 5 pilot forests
in the FY93 appropriations bill for the Forest Service; and,
Pooling and dedication of all federal timber and salvage sale revenues in the
affected region into support for the planning and implementation of forest health
treatment projects on both NFS and BLM forest lands for the 5-year transition
and test period.
In preparing plans for forest health treatment projects, federal land managers should be
instructed to:
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Place first priority on areas that need treatment which are located near population
centers, which have road access, and where treatment can be less controversial,
more quickly started, and more likely to help prevent disastrous impacts from
wildfires or floods.
Utilize private consultants where needed to supplement agency technicians and
accelerate the process of carrying out stand assessments and the development of
treatment plans;
Develop monitoring plans that begin with, go through, and follow up each
treatment project to provide information on the effectiveness of projects in
reaching the end results sought; and
Utilize local organizations, non-profits, universities, or private consultants where
appropriate in the monitoring program, both to gain the necessary staff and to
broaden the public understanding and trust of the process.
Potential Impacts
1. The Blue Mountains Restoration Strategy
Implementation of the three-year strategy would result in, among other treatments:
Prescribed burning
355,000 acres
Biomass Removal
6,050 acres
Harvest
180,000 acres
Reforestation
90,000 acres
Estimated timber harvest:
200-267 million board feet per year
Estimated employment impact:
1,940-2,587 direct jobs
1,060-1,413 indirect jobs
Estimated costs:
$247 million
Estimated returns:
$100-200 million (These returns may
be low, in light of current economic
conditions. See below.)
Annual savings (wildfire suppression)
$4.3 million/year (for 20 years)
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2. The Northeastern Washington Restoration Strategy
Implementation of the forest health projects called for in the February, 1993, report would
result in, among other treatments:
Prescribed burning
368,000 acres
Tree Density and Growth Management
65,346 acres
Harvest
110,750 acres
Reforestation
44,696 acres
Estimated timber harvest:
295 million board feet per year
Estimated employment impact:
2,865 direct jobs
1,565 indirect jobs
Income:
$829 million (over 3 years) (See
below.)
Annual savings (wildfire suppression):
$1.7 million/year (for 20 years)
Short-term Economic Opportunity
The northwest timber market has been significantly impacted by market forces, including
the reduction in old-growth timber harvest due to court injunctions, the export of logs, and the
recovery in the housing market. Without entering the argument over why the current prices are
high, or trying to predict how long such prices can last, it is evident that a short-term opportunity
exists. That can be judged by looking at the Boise National Forest timber sales record for the
past few months.
The Boise National Forest was hit by a large wildfire in the late summer of 1992. A
major salvage sale program already under way due to huge areas of insect-, drought- and fire-
killed forests was expanded to salvage as much merchantable timber as possible from the
Foothills disaster. The resulting sales in FY 1993 have set new records for timber prices on the
forest, with Ponderosa Pine going for $622/thousand board feet in one sale. To date, the Boise
has sold 139 million board feet for $48,765,753, an average of $350.56/thousand board feet
across all species and grades. This represented almost a doubling of the timber staff's appraisal,
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which totalled $27.6 million for these timber values.
While the high prices received on these sales may be due in part to the Forest's alacrity
in getting fire-killed timber onto the market before its value declined through decay, it must also
be considered that the timber economy on the west coast played a major role. Several Oregon
firms travelled to Boise to bid on these sales and, for the first time in history, two Oregon firms
were successful bidders. Clearly, the effects of the Pacific Coast old-growth transition are being
felt 400 miles or more inland.
While the high prices and demands for inland-west timber have been decried by some
as "moving the problem to the east side," many see it as a major boon for forest management.
To sell fire-killed, otherwise dead, or stressed timber at a price which can help offset the costs
of needed forest improvements is an economic boon seldom, if ever, experienced by forest
managers in this region. With no way to predict how long this level of demand and price will
last, it seems only sensible to do everything possible to accelerate the execution of needed forest
health improvement projects while the market is strong. In so doing, forests can be improved,
jobs created, and economic health improved simultaneously.
For the forest-industry families and businesses on the western slope of the Cascades, a
relocation to work in the forest health projects of the inland west may be traumatic and difficult.
It seems less traumatic, however, than the total loss of economic opportunity, or the need to re-
train into totally different areas of work. After the west-side old growth harvests have been
proscribed, and the west-side second-growth opportunities captured, the inland forest health
opportunities may provide an essential economic opportunity for many families and businesses.
Capturing that opportunity through an intensive 5-year program of facilitating forest health
project planning and implementation on federal forests of the region seems a very low-cost,
high-payback policy option.
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Compensating for impacts on federal payments to counties
As timber harvests on the west side of the Cascades in Oregon and Washington decline,
so too will the federal revenue sharing with states and counties, currently calculated as a portion
of federal timber receipts. In some counties in western Oregon, these revenue-sharing payments
constitute more than two-thirds of the annual budget, and a sudden loss of this income would
put county governments in dire financial straits, just at the time when local social services are
in greatest demand. Any federal plan for easing the major economic transition taking place in
timber-dependent communities in the Pacific Northwest must address the need of county
governments for an adequate and reliable income from federal payments-in-lieu-of-taxes during
this period.
One option that should be considered in the Administration's economic transition plan for
the Pacific Northwest "owl region" is changing the formula by which the payments are
determined from one based on a portion of timber receipts to one based on the area of non-
taxable federal land in the county and the tax revenue it would generate in private ownership,
regardless of the current or planned allocation and use of the federal land and resources. This
could be accomplished gradually over a five-year transition period to minimize fluctuations or
disruptions in this heavily relied upon source of local government income.
Background
Both the Forest Service and BLM pay a portion of their timber sale receipts to counties
in which federal forest lands are located to compensate for the loss of property taxes that would
be levied were these lands privately owned. Since 1908, the Forest Service has been paying 25
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percent of receipts.¹² Later amendments made sure that the counties also received 25 percent
of deposits, such as those made under the Knudson-Vandenberg Act, and of payments-in-kind,
such as the value of roads constructed by timber purchasers. BLM returns 50 percent of receipts
to counties in western Oregon where the O&C lands are located.
Congress added a payments-in-lieu-of-taxes program in 1976 to reimburse local
governments for taxes on federal lands that produce few or no revenues. This law provides that
local governments get the higher of seventy-five cents per acre reduced by revenue sharing
payments, subject to a cap based on population, or a flat ten cents per acre. This means that
national forest counties receive up to seventy-five cents per acre in addition to the regular 25
percent share of timber sales and other revenues.¹³
These payments are a significant source of income to western Oregon and western
Washington counties. In 1991, a total of $178 million was paid to local government in Oregon
and Washington, the vast majority of it to counties west of the Cascades. In some rural counties,
such as Douglas county in southwestern Oregon, these payments constitute two-thirds of the
entire county budget.
A number of serious drawbacks have been recognized with this approach to determining
federal payments to counties, including problems of distributional equity and obstacles to the
sustainable management of forest ecosystems. More than two decades ago, the Public Land Law
Review Commission determined that the pattern for sharing federal receipts with local
government bears little relationship to the burdens imposed on them by the immunity of federal
lands from taxation. In areas with high timber values, the federal government pays counties
significantly more than they would receive if the lands were in private ownership. Conversely,
federal lands with low timber values return significantly less to counties that they would in
12 16 U.S.C. 500.
13 Hagenstein, P., personal communication, March 15, 1993.
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private ownership. This is illustrated in Table 1 with examples from the Willamette National
Forest (Oregon), the Talladega (Alabama), and the White Mountain (New Hampshire) comparing
the current payment structure with what tax revenues would be if the lands were in private
ownership.
Table 1. Comparison of payments to counties from four national forests under the current formula against estimated tax
revenue were these lands in private ownership
Average
Local taxes per acre:
National
receipt
Payments per acre:
Yield tax
Forest
per acre
25% Fund
PILT
Total
%
Amount
Land
Total
Willamette
119.80
29.95
.10
30.05
6.5
7.79
1.00
8.79
Talledega
8.80
2.20
.10
2.30
8.0
.70
1.00
1.70
White Mountain
3.00
.75
.10
.85
10.0
.30
1.00
1.30
Even within western Oregon alone there are significant distributional inequities in federal
revenue sharing. On the Coos Bay Wagon Road lands, an area administered by BLM, the federal
government has paid an average of less than $6 per acre over the past ten years, based on an
equivalency to private property tax and timber severance tax. During the same period, the Forest
Service paid counties an average of about $20 per acre of national forest land, and BLM paid
more than $40 per acre on the O&C lands.
This linkage between timber receipts and county payments has placed local governments
in the position of pressing Congressional representatives to set annual federal timber sale targets
at the highest possible level in order to maintain the level of federal payments and to minimize
fluctuations in this income from one year to the next.¹⁴ Timber sale targets established in
14
Sample, V.A., "What's Really Driving National Forest Management," American Forests,
January/February, 1989.
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annual appropriations for the Forest Service and BLM have often exceeded those requested by
the agencies themselves. In many cases, local governments are placed in a position of advocating
for the short term what might be against the region's interests in the longer run. Local
economies, like a portfolio of investments, are more stable and productive when they are based
on a wide diversity of activities rather than just a few. This is especially true if one of the major
local industries is inherently cyclical, highly sensitive to fluctuating interest rates, or locally on
the decline.
Local governments west of the Cascades have recognized this, but have been unwilling
to risk a drop in income from shifting to a different basis for payments-in-lieu-of-taxes.
Indications have been clear for some time that the PNW would experience a major decline in
timber supply beginning in the early 1990s. Economic studies as long ago as 1963 predicted a
depletion of the region's old-growth timber volume during the 1990s, with significantly lower
timber harvests for several subsequent decades until the youngest of the second growth timber
reached merchantable size.¹⁵ The land and resource management plans developed for each
national forest following the passage of the National Forest Management Act in 1976 called for
a one-quarter reduction in allowable harvest levels from the 1980s to the year 2000. Various
habitat conservation plans for the northern spotted owl have called for further reductions in the
volume harvested from federal forest lands.
With federal timber sales almost certain to fall sharply from recent levels and remain
relatively low for several decades, it is time to reevaluate the current approach. The counties
affected by habitat conservation plans for the northern spotted owl are under a temporary
legislative arrangement which maintains payments at average for 1986-1990, a period of both
high timber harvest levels and high timber prices. The current arrangement expires at the end
of FY 1995, however, and a longer term solution will be needed.
15 See Sample, V. and Le Master, D., Assessing the Employment Impacts of Protecting
Habitat for the Northern Spotted Owl (Washington, DC: American Forestry Association, 1992).
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Determining federal payments to counties on the basis of land area
The economic transition plan for the Pacific Northwest should include a provision for
maintaining federal payments to the affected counties at no less than a ten-year rolling average,
county by county, during the next five years, after which payments would be based on the area
of national forest land in the county and equivalent to what would be expected if the lands were
in private ownership.
A rolling ten-year average would extend the basis for calculation back to the mid-1980s,
a period of record high federal timber harvests and receipts. During the five-year economic
transition period, this would maintain payments to counties at a significantly higher level than
could be expected under either the existing timber receipts formula or a formula based on private
tax equivalency. In addition, the level of payments would become far more stable and
predictable (Figure 1 and Appendix A), simplifying local government budgeting and facilitating
better long-term planning for capital investments in schools, roads, and other local public works
projects. Any significant change in payments associated with the shift to a tax equivalency basis
would take place gradually, providing time for adjustment in local government budgeting and
providing substantial additional income to the counties during the economic transition. The
rolling average would be calculated on a county-by-county basis.
At the end of the five-year economic transition period, the formula for determining
federal payments-in-lieu-of-taxes would revert to an equivalent to the combination of property
and timber severance taxes levied on private forest landowners in the county. A precedent for
this approach exists on BLM's Coos Bay Wagon Road (CBWR) lands in southwestern Oregon.
The assessed value of forest land for property tax is a function of the price of second-growth
Douglas-fir stumpage over the previous three-year period. Severance tax is 6.5 percent of the
value of the timber harvested. Between 1984 and 1988, the CBWR lands in Roseburg County,
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Oregon yielded $59,935 in severance tax and $18,321 in property tax annually for 13,924
acres.¹⁶
Since perhaps a third of the payment is based on federal land acreage in the county,
independent of the land allocation or resource use, such an approach could be expected to
significantly reduce the pressure on federal forest managers to keep timber harvests high simply
to maintain steady payments to local government. However, if the severance tax component is
perceived as based on the amount of timber harvested the difficulties associated with the linkage
between federal timber harvest levels and federal revenue sharing may not be eliminated.
One alternative approach is a strict per acre payment, at a rate mutually agreed upon by
the federal agency and county government involved, and renegotiated on a five year basis. If
care is not exercised, this approach could have a tendency to be applied like an ad valorem tax.
Ad valorem taxes have been replaced with severance taxes in many states precisely because they
were seen as forcing forest landowners to harvest timber prematurely. Because timber growth
increased property value over time, the ad valorem tax creeps upward as well, with no current
income to the landowner to offset the increases tax. The response of private landowners has been
to harvest the timber as soon as possible to gain income to offset the taxes and to reduce property
value. If this sort of approach were taken on federal forest lands, whether intentionally or not,
it could bring a different sort of pressure to harvest, and could interfere with federal agencies'
attempts to adopt long-rotation management strategies consistent with providing more late-
successional forest habitat.
Legislative direction to adopt a land area basis for the calculation of payments-in-lieu-
of-taxes would have to provide that the value of standing timber not be a component in the
calculation, the value of these intact forest ecosystems accruing to the local government and
citizens in other ways, including watershed protection, fish and wildlife habitat, and opportunities
16 Draft Resource Management Plan for the Roseburg District (Portland, OR: Bureau of
Land Management, 1992)
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for recreation and tourism. One possibility that deserves further discussion and analysis is to
calculate federal payments on the equivalent of a land tax based on current use valuation.
Current use valuation has been used successfully by many state and local governments to reduce
the pressure on private landowners to shift land use toward development in order to escape a
growing tax burden. It has been useful in allowing owners to manage forest lands for
conservation purposes, including long-rotation management aimed at watershed protection and
habitat for wildlife needing late-successional forest ecosystems. Payments should be consistent
with current use valuation assessments used on private lands in the county.
Figure 1 - - Payments to Counties/Acre in Owl Region of OR & WA
1974-2002
90
80
70
60
50
$$/Acre
40
30
20
10
0
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Year
OR Forest Service
WA Forest Service
BLM O&C
1993-2002 calculated by 10-yr. avg. of previous decade
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Private Land Relationships
in Forest Ecosystem Management
To resolve the current controversies over endangered-species habitat protection, and to
avoid such acute ecological and socioeconomic difficulties in the future, we must look beyond
the traditional single-species approach to biodiversity conservation and begin focusing on the
sustainable management of forest ecosystems. In most regions of the United States, including
the Pacific Northwest, the delineation of ecologically important, landscape-scale ecosystems
encompasses both public and private lands, often interspersed with one another. An effective
forest ecosystem management strategy for the Pacific Northwest will recognize the important role
that private lands can play in complementing and supplementing ecosystem management on
adjacent public forest lands, but it must also recognize and accommodate the appropriate
economic and other goals and objectives on private lands.
Public forest lands constitute only a small portion of the total forest land base, and are
not sufficient in themselves to adequately protect biodiversity in forest ecosystems. Nationally,
federal and state lands constitute about 20 percent of the total forest land base. Of the remaining
80 percent that is privately held, 20 percent is industrial forest land and the remaining 60 percent
is held by non-industrial private owners, such as farmers. In Oregon and Washington, 43 percent
of the forest land is privately owned, 25 percent by corporations and 18 percent by non-industrial
private owners. 17 Even in the Pacific Northwest, where ownerships tend to be larger and more
contiguous than in many regions of the country, the delineation of ecosystems along watershed
or other ecological boundaries will nearly always encompass an intermingled mixture of public
17 Wadell, K, D. Oswald, and D. Powell, Forest Statistics for the United States, 1987,
Resource Bulletin PNW-RB-168 (Portland, OR: USDA Forest Service, Pacific Northwest
Research Station, 1989).
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and private forest lands. This intermingling, combined with the fact that the vast majority of
forest land is in private ownership, means that private lands have a critical role to play in any
ecosystem-based strategy to protect biological diversity, water quality, and many other natural
values, whether just for the Pacific Northwest "owl region" or for the United States as a whole.
Private forest landowners have a variety of different goals, usually including economic
objectives. Often there are opportunities for private owners to better understand and protect
biodiversity values without materially interfering with their primary economic objectives for
owning and managing their forest land. Private timberlands have unique roles and
responsibilities, distinct from public forests. Appropriate economic objectives, such as profitably
growing and producing timber on a commercial basis, are pursued while fulfilling environmental
obligations described in both federal and state laws and regulations.
As the importance of protecting biological diversity in temperate U.S. forest ecosystems
has become evident, many companies have voluntarily sought the advice of ecologists and other
scientists to better understand and protect biodiversity values on private lands. During 1992,
more than 50 private corporations, including several of the largest forest products companies in
the United States, submitted biodiversity conservation proposals for endorsement by the
President's Commission on Environmental Quality (PCEQ).¹⁸ The proposals were reviewed by
a task force on biodiversity on private lands, measured against exacting criteria, and many of
them approved. As company officials came to better understand what biodiversity values existed
on their lands, many found that a great deal could be done to protect these values without
materially interfering with the primary economic objectives for owning and managing the land.
These efforts, supported entirely by the companies' own funds, are continuing today in many
parts of the country.
18 Report of the President's Commission on Environmental Quality (Washington, DC:
Council on Environmental Quality, 1993).
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But private forest landowners are also recognizing the importance of coordination across
ownership boundaries, with adjacent public as well as private landowners, to an integrated
ecosystem-based approach to forest management. It is in everyone's interest to move beyond
the current species-by-species approach to biodiversity conservation--resolving the spotted owl
controversy will mean little if the failure to protect habitat at the ecosystem level results in a
continuation of endangered species listings.
Representatives of forest products companies in the Pacific Northwest have stated their
commitment to ecosystem management on public forest lands.¹⁹ There are opportunities for
adjacent private lands to complement and supplement the achievement of ecosystem management
on public forest lands through new approaches that deal collectively with groups of species and
habitats. Private landowners have identified a number of actions they believe clarify the
appropriate role of private forest lands in managing the forest ecosystems of the Pacific
Northwest:
Protecting riparian areas and wetlands
Private forest landowners have the responsibility for managing riparian areas and wetlands
to provide for water quality, fish habitat, and associated wildlife values. Management
objectives may include: provision of shade and large organic debris for streams,
increasing the conifer component on riparian areas, assessing and monitoring the
effectiveness of current regulations, and cooperating with adjacent landowners to achieve
desired riparian conditions.
Providing habitat for early and mid-successional species
Private forest landowners will provide habitat for early successional species in conjunction
with their primary operation goal of sustainable timber production. In addition, through
silvicultural treatments designed to create and retain structures (large trees, snags, and
19 Statement of Jim Geisinger, President, Northwest Forestry Association to the President's
Forest Conference, Portland, Oregon, April 2, 1993.
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down logs) and diverse vegetative conditions, they will provide for many mid-
successional species (those that depend on the above structures) and some late-
successional species (those that require structural attributes or features of old forest
stands).
Assisting public land managers in meeting their responsibilities for late successional
ecosystems.
While the protection of late-successional ecosystems and species is primarily the
responsibility of public land managers, it is appropriate and desirable for private forest
landowners to cooperate, where practical, in meeting these objectives. For example,
private landowners might complement public obligations by providing owl dispersal
habitat, participating in land trades or sales critical to conservation programs, and working
within incentive and/or compensation programs that encourage protection of late-
successional species.
Maintaining site productivity.
Private forest landowners will maintain the basic productive capacity of their lands, with
particular reference to soil properties. This may be accomplished through such measures
as minimizing soil disturbance and compaction, improving road construction and
maintenance, and identifying and protecting fragile soils.20
However, private forest landowners currently face some substantial disincentives for
participating in a cooperative approach to forest ecosystem management.
Log shortages from reduced federal timber sales and price escalation have
encouraged premature harvest, particularly on small non-industrial holdings.
20
Smith, Gordon and Kohm, Katherine, The Role of Industrial Forestlands in the
Management of Western Washington's Forest Ecosystems. Discussion Paper. (Seattle, WA:
Olympic Natural Resources Center, University of Washington, 1993).
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Uncertainty in both federal and state forest regulation has discouraged holding
forest lands for long-term forestry purposes.
Forest improvements are often being deferred for fear that investment returns will
not be realized due to future harvest restrictions.
Productive forest lands are being converted to other land uses due to urban
encroachment which may limit its ultimate use.
Coordination across landscapes among corporate private forest landowners may
be viewed as antitrust violations.
The 1990 Farm Bill offers valuable incentives to non-industrial private
landowners for stewardship practices, but uneven application by the states under
individual state forest practices acts has penalized private owners and resulted in
assistance being denied.
Change is essential if we are to achieve harmonious protection and sustainable
management of our forest ecosystems. Continuing to focus on the stand level, single species and
jurisdiction in isolation can only intensify the crisis. It is time to look at broad ecosystems in
a collaborative approach with all forest landowners. By restoring and maintaining biological
diversity on a broad ecosystem basis, it is possible to achieve harmonious environmental
protection and sustainable use of our forest resources. Among the specific policy opportunities
for accomplishing this:
1.
Develop a multi-agency/party Regional Strategy for Biodiversity and Ecosystem
Management based on the bioregion (OR, WA and Northern CA), landscape/watershed,
and stand levels. Parties should be the three states and their applicable agencies and the
affected Federal agencies with private landowners participating as signatories or
associates.
2.
Develop non-regulatory approaches to facilitate the coordination across jurisdictional
boundaries in inventory, monitoring, planning and management decision making. These
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might include programs to encourage private voluntary efforts and the development of
market-based economic incentives. Consider changes in federal financial and tax
incentives. Coordinated Resource Management Plans (CRMP), such as Ecosystem
Management Agreements, could be developed jointly among landowners within an
ecosystem planning area to coordinate management strategies and action plans. Incentives
could be built in where landowner objectives are compromised.
3.
Adopt funding reform for Federal forestry investments. Include incentives on private land
for public values not reflected in the market place. Public forests should be funded on
a stewardship basis with product flows a result.
4.
Facilitate the development and application of collaborative decision making and
information gathering (remote sensing and GIS). This process is best articulated in the
recent report of the Blue Ribbon Panel on Forest Inventory and Analysis.²¹
5.
Avoid prescriptive legislation. Clearly articulate principles, goals, and objectives, then
create a policy and regulatory environment conducive to the development of innovative
local solutions to local situations.
6.
Respect the goals and objectives of individual landowners. Production on non-market
values by private landowners should be voluntary, encourage and facilitated by incentive
or compensation, not by regulation.
7.
Strengthen the capability and commitment of private, public and academic institutions to
the development of a more complete knowledge base to guide the task of understanding
and implementing ecosystem management.
21 Report of the Blue Ribbon Panel on Forest Inventory and Analysis (Washington, DC:
American Forest and Paper Association, 1992).
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8.
Build community and public support through education and participation in decision
making. Human communities, local economies and private property are important
considerations along with healthy and sustainable ecosystems.
Private forest lands can and must play an important role in any overall strategy to protect
and sustainably manage habitat for the northern spotted owl and other late-successional forest
species in the Pacific Northwest and throughout the country. There is a new understanding and
a new willingness among private forest landowners to play a complementary and supplemental
supporting role to the protection of biological diversity and other ecological values on adjacent
public lands. Currently there are a number of important disincentives for closer cooperation
among adjacent public and private forest landowners. It is important to identify these
disincentives and eliminate them to the extent possible while not undercutting the economic
purposes for which private organizations and individuals own and manage their forest land.
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Interactive Use of GIS Technology
to Prioritize Late-Successional Forests of
Greatest Ecological Value
Though all the remaining areas of old-growth forest in the Pacific Northwest are
important, not all are of equal importance to the survival of the northern spotted owl and
associated species characteristic of late-successional forest ecosystems. In the event that the
political compromise that is reached in this issue calls for some level of continued harvesting in
old-growth forests during an economic transition period, it is only prudent to be prepared with
the best available scientific information showing which of these areas is most critical, and which
areas harvesting should be directed towards if harvesting is to take place. Recent rapid advances
in remote-sensing and geographic information (GIS) technology have made possible the
development of better ecological information on the extent, location, and nature of PNW old-
growth forests than has ever been available before. The detailed ecological information, in
combination with the technological capability to analyze it and display it according to a variety
of different ecological criteria, afford a powerful tool for prioritizing the remaining old-growth
to ensure that the most valuable areas are known.
Background
What remains of the old-growth forest in the Pacific Northwest is but a fraction of what
it was only a century ago. As our understanding of the ecological functioning of these forests
improves, it is becoming increasingly clear how important they are to the viability of late-
successional forest species including--but not limited to--the northern spotted owl.
The most comprehensive and authoritative prioritization of Pacific Northwest old-growth
was conducted by the Scientific Panel on Late-Successional Forest Ecosystems (the "Gang of
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Four"). With the help of a host of scientists and resource managers, the Scientific Panel took
the latest available maps of "potential old-growth" prepared from LandsatTM satellite photos and
hand-drew boundaries delineating the "most ecologically significant" (LS/OG1) from the
"ecologically significant" (LS/OG2), and the "remainder" (LS/OG3).
The mapping focused on larger aggregations of late-successional forest stands suitable
as management units for old-growth reserves rather than small individual patches. This means
that some areas of younger forest and cutover areas are included in areas mapped as late-
successional forest. 22 It was assumed that young stands within the old-growth reserves would
eventually mature and fill in these openings. On the other hand, this approach left many small
sections of old-growth outside the boundaries of the proposed reserves and thus not
recommended for protection under the interim plan. Collectively, these small sections represent
thousands of acres of old-growth. It should also be noted that the mapping was done "to support
the development of interim proposals for reserves which would maintain options for a longer
term solution." It was thus a conservative estimate that may hold additional flexibility upon
closer analysis. Since the release of the Scientific Panel's report in October 1991, much
additional work has gone into the maps to assure better mapping precision and to check maps
against conditions on the ground.
GIS for landscape-scale ecosystem analysis and consensus-building
In the development of the Administration's proposal for protecting late-successional and
old-growth habitat for the spotted owl and other species, it will be important for ecologists,
resource managers, policymakers, and concerned citizens to be able to determine the effects of
imposing certain ecological or economic criteria, and to propose new alternatives as other
opportunities become evident.
22 Johnson, K.N., J.F. Franklin, J.W. Thomas, and J. Gordon, Alternatives for Management
of Late-Successional Forests of the Pacific Northwest, The Report of the Scientific Panel on
Late-Successional Forest Ecosystems, October 8, 1991, p. 2.
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For example, the total acreage mapped as old-growth is only part of what needs to be
evaluated. It is critically important that the ecological condition of these stands be known as
well. Reserves proposed in land and resource management plans prepared by the Forest Service
and BLM were often in small or narrow blocks which, though they might serve other
environmental or aesthetic needs, did not effectively maintain old-growth ecological
characteristics and conditions. The relationship of federal forests to forests on adjacent state and
private lands will influence the effectiveness of the federal forest lands as late-successional
habitat. The age and structure of adjacent non-federal forests, now and in the foreseeable future,
will have a major effect on whether areas of federal forest should be classified as top priority for
reserves.
Recent advances in remote-sensing/GIS technology, and improved documentation of the
ecological data for Pacific Northwest forests, provide a tool with which key scientists and
decision makers can interact with one another in "real time" to test assumptions, explore new
alternatives, and perhaps arrive at a solution that was not evident before. The map of remaining
areas of old-growth, and their priorities relative to one another, can change drastically depending
on the ecological assumptions imposed, such as buffer width and minimum critical habitat size.
Environmental conditions along the edges of old-growth areas surrounded by cutover lands may
be significantly altered several hundred feet into the old-growth stand, meaning that unmodified
interior forest conditions exist only in a "core area" substantially smaller than the total area of
old-growth. In some cases, the total area of old-growth may meet the minimum critical habitat
size, but fail to do so when this "edge effect" is taken into account.
An example of the kind of interactive analysis that can be done in "real time" is the
testing of various assumptions concerning the minimum width of buffers that consider this edge
effect. Old-growth areas that are fairly contiguous and well connected assuming a 200-foot
buffer may show up as small islands incapable of supporting viable populations when it is
assumed that a 300-foot buffer is needed.
Forest Policy Center
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In searching for an optimal compromise between what is ecologically possible and what
is economically, socially, and politically possible a great deal of give and take will occur. This
can be done with the key interests together and interacting with one another, with old-growth
maps being redrawn on a screen before them to show the effect of each new proposal or
assumption.
In order to utilize this new tool effectively, it will be necessary to get all of the
information in place and clearly define the major alternatives.
The players will need to specify the variables of interest, such as: What are the current
conditions and what impacts need to be measured over what time period? What
constraints should be placed on the landscape?
Alternatives must be specified, and the range of alternatives must be significant if the
analysis is to have any meaning?
Data layers must already be prepared showing key criteria for analysis of the alternatives:
ownership, administrative boundaries, slope, aspect, elevation, hydrology, historical
vegetation, and fragmentation, to name a few.
The next step is to work with decision makers to interactively build models which
simulate change (from present conditions) over time under different alternatives.
The final step is to connect changes in the landscape to changes in habitat and to changes
in the economy. This will provide the primary basis for analysis of the tradeoffs among
the alternatives.
This approach to analysis is critical to finding a solution that maximizes the probability
of long-term viable populations of late-successional forest species while minimizing the negative
Forest Policy Center
Page 38
impacts on timber-dependent communities and the regional economy of the Pacific Northwest.
The politics will still not be easy, but it is entirely plausible that the effective utilization of GIS
technology and the best available data on the ecological classification of Pacific Northwest forests
in a setting that allows open and direct interaction among the major stakeholders may uncover
alternatives that are as yet unknown and untried. And one of those alternatives may be
something very close to the optimal compromise that all are seeking. This should be an explicit
component of the Administration's plan, and sufficient funds and other resources should be made
available to ensure its success.
Forest Policy Center
Page 39
Elimination of Log Export Subsidies:
Effects on Timber Supply and Employment
The export of unprocessed logs from the Pacific Northwest is currently subsidized by the
federal government through an income tax break of as much as 15 percent on the profits from
exports through approved Foreign Sales Corporations. Elimination of this subsidy could change
the economics of decisions by log sellers, resulting in a substantial portion of these log exports
being routed to the domestic market and helping to alleviate the current timber supply shortage
in western Oregon and western Washington. Current price trends suggest that this change in
federal tax policy could bring at least 250 million board feet of logs back into the PNW regional
economy, maintaining at least 1,000 jobs in the forest products and related industries.
Background
To encourage the export of American goods and services, the U.S. federal tax code
provides for a reduced income tax rate on profits from export sales to wholly-owned foreign
subsidiaries of American companies, known as Foreign Sales Corporations (FSCs).²³ In
December 1984, the FSC replaced the Domestic International Sales Corporation (DISC) as the
U.S. Government's primary tax incentive for U.S. exports. Congress passed the FSC legislation
in response to objections raised by some of our foreign trading partners that the DISC rules
created an illegal export subsidy under the General Agreement on Tariffs and Trade (GATT).
The tax incentive provided by the FSC legislation is in the form of a permanent exemption from
23 Taxation on Foreign Sales Corporations, 26 U.S.C. §§ 991-996 (1988).
Forest Policy Center
Page 40
federal income tax for up to 15 percent of the gross income from exports.2⁴ An exemption of
15 percent of gross income is equivalent to a reduction in the corporate income tax rate from 35
percent to slightly less than 29 percent.
The question of log exports has loomed large in the debate over how to mitigate the
impact of preserving old-growth forest habitat on timber-dependent communities. Until recently,
more than 3 billion board feet (BBF) of unprocessed logs were exported annually from Oregon
and Washington, mostly to Japan, China, and Korea.²⁵ The tightening of laws prohibiting the
export of logs from federal lands and new restrictions on the export of logs from state lands have
reduced this to approximately 2.2 BBF in 1992.2 To many, prohibiting the export of these
basic raw material resources has seemed like the natural solution to several problems. It would
route a major source of timber supply back to domestic mills, offsetting at least some portion of
the impact of old-growth set-asides. It would employ American workers in the processing of
valued-added goods for export, improving the balance of trade with our Asian trading
partners.²⁷
But a blanket prohibition of log exports from private lands also raises a host of complex
economic and legal questions, not the least of which relate to restraint of trade and the
attenuation of private property rights. Eliminating the FSC subsidy for the export of unprocessed
logs only (i.e., not affecting exports of lumber, paper, or other wood products) avoids many of
24 Goldstein, M. and Aronoff, A., Foreign Sales Corporations Tax Incentive for U.S.
Exporters (Washington, DC: U.S. Department of Commerce, 1988).
25 Warren, D., Production, Prices, Employment and Trade in Northwest Forest Industries
(Portland, OR: USDA Forest Service, Pacific Northwest Research Station, 1993).
26 A recent decision by the U.S. Ninth Circuit Court of Appeals found that the federal
restriction of log exports by state government is a violation of states' rights, so exports from state
lands can be expected to increase from current levels. See: Board of Natural Resources of the
State of Washington, et al. V. Brown, U.S. Court of Appeals, 9th Cir., May 4, 1993.
27 Letter from the Honorable Peter A. DeFazio to President George Bush, April 12, 1989.
Forest Policy Center
Page 41
these issues. It does not restrain private log sellers from selling to whoever offers the highest
price; it merely eliminates the additional financial incentive, currently estimated to cost taxpayers
approximately $100 million annually,28 that induces private owners to sell their logs to foreign
purchasers rather than to their neighbors.
Impact of log export subsidies on domestic timber purchasers
Under the current system, federal tax policy encourages a log seller to sell to the export
market even if domestic mills are willing to offer the same price as foreign buyers. A 5 percent
reduction in the corporate income tax rate for profits on exported logs, i.e., from 34 percent to
29 percent, means that a domestic purchaser would have to offer the seller a price more than
7.5 percent higher than the foreign buyer for the seller to be indifferent between the two.
In 1992, the average price for softwood sawlogs exported to China was approximately
$500 per thousand board feet (MBF).²⁹ With the FSC subsidy, the after-tax profit to the log
seller would be about $355/MBF. For the log seller to receive the same after-tax profit selling
to a domestic purchaser, the purchaser would have to offer at least $538/MBF. In other words,
a domestic purchaser would have to offer a price more than 7 percent higher than a foreign
purchaser in order to compete for the same log. In a highly competitive commodity market, this
puts the domestic purchasers at a distinct disadvantage, as a matter of federal policy.
For the highest quality logs, the export premium is so large that an elimination of the FSC
subsidy is unlikely to make a significant difference in log seller decisions on who to sell their
logs to. In 1992, the average value of softwood sawlogs exported to Japan was $748/MBF, about
$250 more per MBF than the average domestic price. These are not the same kinds of logs,
however. They tend to be of larger diameter, finer grain, with fewer knots, taper, sweep, or other
28 Letter from Joint Committee on Taxation, U.S. House of Representatives to the Honorable
Fortney Stark, February 6, 1992.
29 Warren, 1993. Op. cit.
Forest Policy Center
Page 42
defects. For fine products such as furniture, moldings, and other millwork, domestic purchasers
pay the export price and get the same high-quality logs as purchased by Japan. With an export
premium of 50 percent or more, a 7 percent FSC subsidy has little influence over the log seller's
decision to sell to the export market, and the elimination of the subsidy is unlikely to change
those decisions.
However, about a quarter of the logs exported to the Far East are similar in quality to
what is purchased by domestic mills. For these logs there is little or no export premium and the
prices between the foreign and domestic markets are very competitive. In 1992, a total of 500.8
MMBF in softwood sawlogs was exported to Korea and China, with a total value of $244
million. The average price for the timber exported to China was $500/MBF, and to Korea
$477/MBF. During the same period, domestic prices for comparable grade (#2) Douglas-fir
sawlogs averaged $475/MBF in western Washington and $539/MBF in western Oregon.³⁰
Export prices have risen substantially during the past five years, but domestic prices have risen
even faster, substantially closing the gap between export and domestic prices for average-quality
softwood sawlogs.
Timber supply and employment effects of eliminating the log export subsidy
Elimination of the FSC subsidy would put domestic purchasers on an even footing with
foreign buyers, and could result in a substantial portion of these average-quality logs staying in
the domestic market. As described above, equivalent prices between the export and domestic
markets would still result in a financial decision by the log seller to sell to the foreign buyer.
A domestic purchaser would have to offer a significantly higher price in order for the log seller
to receive the same after-tax income. While there may be good reasons for the federal
government to not interfere with the free export of private goods, a federal policy that places
domestic purchasers at a distinct competitive disadvantage, and uses taxpayer dollars to put
needed raw materials further out of reach for Pacific Northwest mills is not in the public interest,
30 Log Lines, Arbor-Pacific Forestry Services, Mount Vernon, WA, 1993.
Forest Policy Center
Page 43
for the American people generally and for the people of the Pacific Northwest in particular.
Adding a substantial portion of this 500 MMBF back to the PNW regional timber supply
could sustain at least 1,000 jobs in the Pacific Northwest region. If by eliminating the FSC
subsidy 250 MMBF of domestic-quality logs-half of what is now exported to Korea and China
and less than one eighth of the total volume of softwood sawlogs currently being exported from
Oregon and Washington--can be retained for processing by Pacific Northwest mills, it could help
sustain more than 650 additional direct jobs in forest-products and related industries and an
additional 350 jobs in indirect/induced employment--jobs that would otherwise be lost as the
regional timber supply continues to decline.
Economists at the Forest Service and elsewhere have estimated that every million board
feet of timber harvested generates approximately 9.3 jobs/MMBF are generated directly in the
forest products industry.3 An additional 5.7 jobs/MMBF is generated through indirect and
induced employment.32 About 73 percent of this employment is generated by timber harvesting
and would occur whether the logs were subsequently exported or milled domestically. Thus, the
domestic milling of logs that otherwise would be exported generates approximately 4.0
jobs/MMBF in direct, indirect, and induced employment--about 1,000 total jobs from the
additional 250 MMBF/year. This might be offset to some extent by the tradeoff of export-
related employment and the indirect and induced jobs it represents.
31 USDA Forest Service, Economic Effects of Critical Habitat Areas on the National Forests,
An Update of the June 5, 1991 Analysis (Washington, DC: USDA Forest Service, October 1991).
32 Direct employment includes both primary and secondary wood processing. Primary wood
processing consists of logging, lumber production, plywood production, and the manufacture of
pulp and paper. Secondary wood processing is the manufacturing of finished goods (e.g.,
furniture, millwork). Indirect employment generally consists of activities servicing the timber
industry, such as transportation, marketing, and equipment sales/maintenance. Induced
employment involves providing goods and services purchased with wages, taxes, and other forms
of income derived from the forest products industry by individuals and government, ranging from
local government employees to employees of the local bank or grocer.
Forest Policy Center
Page 44
A bill currently under consideration in the House, H.R. 1542, proposes to eliminate the
FSC subsidy for log exports while retaining the original intent of the FSC for all other exports,
including lumber, panels, and other wood and paper products. This approach would do away
with a subsidy that is not needed and that works at cross purposes with efforts to mitigate the
economic impact of reduced timber supply on the economic health and welfare of communities
in western Oregon and western Washington.
One further consideration is for federal policymakers to take the estimated $100 million
annually that now underwrites the log export subsidy, along with some portion of the federal
income tax windfall associated with the recent steep rise in timber prices in the Pacific
Northwest, and invest it in economic transition assistance aimed at developing a sustainable
regional economy that is ecologically sound, economically viable, and socially responsible.
Forest Policy Center
Page 45
Appendix A:
Federal payments to counties in Washington and Oregon, 1974-1992, with projections to 2002
based on a ten-year rolling average (by total payments and per-acre equivalent).
Average per acre Oregon and Washington payments to
counties 1972-1992 with projections to 2002 based on
10-year rolling average (1991-2 adjusted for
spotted owl guarantees)
O&C
OR FS
WA
FS
OR&WA PS
1972
14.67
1973
18.38
4.29
1974
22.51
4.02
1.69
1975
19.22
3.52
1.58
2.51
1976
34.55
6.34
2.04
4.10
1977
41.31
8.49
2.86
5.55
1978
8.00
9.96
3.09
6.38
1979
37.70
11.73
4.00
7.70
1980
38.02
9.89
3.32
6.46
1981
37.77
8.43
2.90
5.54
1982
15.31
4.63
1.88
3.20
1983
2.00
6.36
2.05
4.11
1984
18.61
7.99
2.50
5.12
1985
25.91
8.81
2.12
5.32
1986
23.81
10.73
2.70
6.54
1987
28.20
12.36
3.29
7.63
1988
27.00
13.68
4.43
8.85
1989
42.79
15.83
4.71
10.03
1990
79.68
13.86
3.66
8.54
1991
37.44
13.03
4.03
8.33
1992
35.31
12.04
3.41
7.54
1993
32.07
11.47
3.29
7.20
1994
35.08
11.98
3.41
7.51
1995
36.73
12.38
3.50
7.75
1996
37.81
12.74
3.64
7.99
1997
39.21
12.94
3.74
8.14
1998
40.31
12.99
3.78
8.19
1999
41.64
12.93
3.72
8.12
2000
41.53
12.64
3.62
7.93
2001
37.71
12.51
3.62
7.87
2002
37.74
12.46
3.57
7.82
Source: USDA Forest Service and USDI Bureau of Land
Management
Table A.1-Forest Service 25% payments to counties 1973-1992, with projections to 2002 based on 10-year rolling average
(1991-2 adjusted for spotted owl guarantees)
County/
Clackamas
Curry
Douglas
Jackson
Josephine
Lane
Linn
Multnomah
Tillamook
Yamhill
Acre
(510424)
(559739)
(904993)
(402380)
(296170)
(1334031)
(466332)
(76423)
(91223)
(25500)
Benton
Coos
Deschutes
Hood R.
Jefferson
Klamath
Lincoln
Marion
Polk
Wasco
Total
(16310)
(57939)
(980193)
(212637)
(164996)
(1722703)
(171651)
(204117)
(318)
(211350)
(8409429)
in million dollars
1973
0.16
2.56
0.24
1.81
1.02
5.59
1.07
1.55
0.20
0.97
2.45
9.68
1.65
3.23
1.30
0.36
0.00
0.89
1.05
0.25
36.04
1974
0.14
2.65
0.23
1.80
1.75
3.78
1.10
1.28
0.32
0.96
2.91
8.72
1.44
3.03
1.25
0.37
0.00
0.78
1.08
0.22
33.83
1975
0.11
1.97
0.20
1.60
1.03
4.82
0.82
1.28
0.19
0.86
2.00
7.91
1.14
2.76
1.08
0.28
0.00
0.62
0.80
0.17
29.64
1976
0.22
3.64
0.39
3.03
2.77
7.62
1.52
1.97
0.50
1.60
4.14
13.69
2.27
4.63
1.86
0.52
0.00
1.23
1.49
0.27
53.35
1977
0.31
3.72
0.48
3.45
3.69
9.31
1.55
2.97
0.65
1.85
5.67
20.75
3.22
7.28
2.61
0.53
0.01
1.75
1.52
0.07
71.36
1978
0.36
4.07
0.62
4.65
3.38
12.82
1.69
4.27
0.60
2.51
7.65
22.36
3.77
7.46
2.71
0.58
0.01
2.04
1.66
0.56
83.78
1979
0.39
5.39
0.78
6.28
4.41
14.98
2.24
5.27
0.78
3.37
9.86
24.09
4.05
7.97
3.03
0.76
0.01
2.20
2.20
0.61
98.66
1980
0.32
7.05
0.53
3.86
3.08
10.35
2.94
3.43
0.58
2.08
7.80
21.20
3.35
7.34
3.08
1.00
0.01
1.81
2.88
0.50
83.19
1981
0.36
5.59
0.48
3.05
4.64
9.70
2.33
4.38
0.82
1.71
6.58
13.06
3.73
6.26
2.57
0.79
0.01
2.02
2.28
0.56
70.91
1982
0.14
2.26
0.18
1.01
2.22
6.41
0.94
1.76
0.39
0.58
2.90
11.03
1.52
3.90
1.43
0.32
0.00
0.82
0.92
0.23
38.97
1983
0.19
3.67
0.27
1.71
4.53
6.65
1.53
3.91
0.78
1.02
7.57
9.56
2.30
4.59
1.82
0.52
0.00
1.08
1.50
0.30
53.50
1984
0.27
4.01
0.34
2.05
5.10
10.55
1.67
2.77
0.88
1.14
9.89
14.97
2.80
4.69
1.90
0.57
0.01
1.51
1.64
0.42
67.16
1985
0.28
3.46
0.46
3.35
5.02
9.53
1.44
4.18
0.86
1.85
10.22
18.15
2.89
6.24
2.28
0.49
0.01
1.57
1.41
0.43
74.10
1986
0.39
5.44
0.55
3.50
4.84
11.74
2.27
4.58
0.85
1.94
11.75
22.29
4.10
7.30
2.85
0.77
0.01
2.20
2.22
0.61
90.19
1987
0.35
5.38
0.58
4.13
4.44
18.99
2.24
5.47
0.78
2.29
13.04
25.34
3.70
8.52
3.20
0.77
0.01
1.99
2.20
0.55
103.97
1988
0.48
6.70
0.73
4.90
3.55
16.09
2.79
5.48
0.65
2.68
15.61
29.46
5.06
9.87
3.77
0.97
0.01
2.72
2.74
0.75
115.01
1989
0.53
6.27
0.89
6.42
3.20
22.82
2.60
6.40
0.59
3.48
16.83
34.56
5.56
11.49
4.18
0.91
0.01
2.99
2.58
0.83
133.14
1990
0.34
6.12
0.62
4.67
4.18
24.28
2.54
4.46
0.75
2.52
13.30
29.50
3.57
10.13
3.76
0.89
0.01
1.92
2.52
0.53
116.60
1991
0.41
5.94
0.67
4.80
3.28
18.89
2.47
4.97
0.60
2.60
13.31
28.19
4.26
9.41
3.53
0.89
0.01
2.29
2.45
0.63
109.60
1992
0.38
5.36
0.61
4.25
3.64
16.84
2.23
4.82
0.65
2.32
13.23
25.54
3.97
8.48
3.18
0.80
0.01
2.11
2.22
0.59
101.22
1993
0.36
5.23
0.57
3.98
4.18
15.64
2.18
4.70
0.74
2.18
12.48
23.76
3.82
8.07
3.05
0.76
0.01
2.04
2.15
0.56
96.45
1994
0.38
5.39
0.60
4.20
4.14
16.54
2.24
4.78
0.74
2.30
12.97
25.18
3.97
8.42
3.17
0.78
0.01
2.13
2.21
0.59
100.74
1995
0.39
5.53
0.63
4.42
4.05
17.13
2.30
4.98
0.72
2.42
13.27
26.20
4.09
8.79
3.30
0.80
0.01
2.20
2.27
0.61
104.10
1996
0.40
5.74
0.65
4.52
3.95
17.89
2.39
5.06
0.71
2.47
13.58
27.00
4.21
9.05
3.40
0.83
0.01
2.26
2.36
0.62
107.10
1997
0.40
5.77
0.66
4.63
3.86
18.51
2.40
5.11
0.69
2.53
13.76
27.47
4.22
9.22
3.45
0.84
0.01
2.26
2.37
0.63
108.79
1998
0.41
5.81
0.66
4.68
3.80
18.46
2.42
5.08
0.68
2.55
13.83
27.69
4.28
9.29
3.48
0.85
0.01
2.29
2.39
0.63
109.28
1999
0.40
5.72
0.66
4.66
3.83
18.70
2.38
5.04
0.69
2.54
13.66
27.51
4.20
9.24
3.45
0.83
0.01
2.25
2.35
0.62
108.70
2000
0.39
5.66
0.63
4.48
3.89
18.29
2.35
4.90
0.70
2.44
13.34
26.80
4.06
9.01
3.38
0.83
0.01
2.17
2.33
0.60
106.26
2001
0.39
5.61
0.63
4.46
3.86
17.69
2.34
4.94
0.69
2.44
13.34
26.53
4.11
8.90
3.34
0.82
0.01
2.20
2.31
0.61
105.23
2002
0.39
5.58
0.63
4.43
3.92
17.57
2.32
4.94
0.70
2.42
13.35
26.37
4.09
8.85
3.32
0.81
0.01
2.19
2.30
0.61
104.79
Table A.2-Forest Service 25% payments/acre to Oregon counties 1973-1992, with projections to 2002 based on 10-year rolling average
(1991-2 adjusted for spotted owl guarantees)
County/
Clackamas
Curry
Douglas
Jackson
Josephine
Lane
Linn
Multnomah
Tillamook
Yamhill
Acre
(510424)
(559739)
(904993)
(402380)
(296170)
(1334031)
(466332)
(76423)
(91223)
(25500)
Benton
Coos
Deschutes
Hood R.
Jefferson
Klamath
Lincoln
Marion
Polk
Wasco
Average
(16310)
(57939)
(980193)
(212637)
(164996)
(1722703)
(171651)
(204117)
(318)
(211350)
(8409429)
in
dollars
per
acre
1973
9.69
5.02
4.13
3.23
1.04
6.17
5.02
3.86
1.19
3.29
1.42
7.25
9.63
6.92
6.37
4.75
9.69
9.80
4.96
9.67
4.29
1974
8.47
5.19
4.02
3.22
1.79
4.18
5.19
3.19
1.92
3.24
1.69
6.54
8.42
6.49
6.13
4.91
8.47
8.57
5.12
8.45
4.02
1975
6.68
3.86
3.47
2.86
1.05
5.33
3.86
3.18
1.16
2.90
1.16
5.93
6.64
5.92
5.30
3.65
6.69
6.76
3.81
6.67
3.52
1976
13.30
7.13
6.69
5.41
2.83
8.42
7.13
4.90
3.01
5.42
2.40
10.26
13.22
9.94
9.11
6.74
13.31
13.46
7.04
10.58
6.34
1977
18.91
7.28
8.29
6.16
3.76
10.29
7.27
7.38
3.93
6.25
3.29
15.55
18.74
15.61
12.79
6.87
18.95
19.17
7.17
2.70
8.49
1978
22.15
7.98
10.69
8.31
3.45
14.17
7.97
10.60
3.65
8.46
4.44
16.76
21.95
16.00
13.28
7.54
22.17
22.42
7.86
22.11
9.96
1979
23.80
10.55
13.42
11.22
4.50
16.55
10.54
13.10
4.73
11.36
5.73
18.06
23.61
17.09
14.86
9.97
23.82
24.11
10.40
23.77
11.73
1980
19.64
13.82
9.16
6.90
3.14
11.44
13.85
8.53
3.50
7.01
4.53
15.89
19.53
15.74
15.07
13.07
19.65
19.89
13.63
19.61
9.89
1981
21.82
10.95
8.37
5.44
4.74
10.72
10.95
10.89
4.97
5.76
3.82
9.79
21.73
13.43
12.57
10.36
21.83
22.10
10.80
21.78
8.43
1982
8.87
4.44
3.07
1.80
2.26
7.08
4.43
4.37
2.36
1.95
1.68
8.27
8.84
8.37
7.03
4.19
8.88
8.98
4.37
8.86
4.63
1983
11.71
7.20
4.59
3.05
4.62
7.35
7.21
9.73
4.73
3.43
4.39
7.16
13.43
9.84
8.93
6.81
11.72
11.86
7.10
11.70
6.36
1984
16.32
7.85
5.93
3.66
5.20
11.65
7.86
6.88
5.32
3.85
5.74
11.22
16.29
10.05
9.30
7.43
16.34
16.60
7.75
16.30
7.99
1985
16.90
6.77
7.91
5.98
5.12
10.53
6.77
10.39
5.22
6.25
5.93
13.60
16.86
13.39
11.15
6.41
16.91
17.18
6.67
16.87
8.81
1986
23.91
10.66
9.56
6.25
4.94
12.97
10.67
11.39
5.14
6.56
6.82
16.71
23.86
15.65
13.96
10.10
23.93
24.14
10.51
23.82
10.73
1987
21.58
10.53
10.03
7.37
4.53
20.99
10.55
13.59
4.75
7.73
7.57
19.00
21.55
18.28
15.67
10.10
21.60
21.79
10.39
21.50
12.36
1988
29.48
13.13
12.63
8.75
3.62
17.78
13.13
13.62
3.95
9.04
9.06
22.08
29.50
21.16
18.46
12.63
30.92
29.80
12.96
29.50
13.68
1989
32.40
12.29
15.38
11.47
3.26
25.21
12.25
15.90
3.59
11.74
9.77
25.91
32.42
24.64
20.49
11.89
32.43
32.75
12.23
32.43
15.83
1990
20.81
11.99
10.67
8.34
4.26
26.83
11.96
11.08
4.54
8.50
7.72
22.12
20.80
21.71
18.44
11.62
20.81
21.02
11.94
20.81
13.86
1991
24.84
11.64
11.61
8.57
3.34
20.87
11.62
12.35
3.64
8.79
7.73
21.13
24.84
20.18
17.30
11.59
24.84
25.12
11.61
24.84
13.03
1992
23.14
10.50
10.51
7.60
3.71
18.61
10.49
11.97
3.95
7.84
7.68
19.14
23.14
18.18
15.59
10.49
23.14
23.14
10.49
23.14
12.04
1993
22.11
10.26
9.88
7.10
4.26
17.28
10.25
11.69
4.48
7.37
7.24
17.81
22.27
17.31
14.93
9.91
22.26
22.34
10.17
22.09
11.47
1994
23.15
10.56
10.41
7.51
4.23
18.27
10.55
11.88
4.46
7.77
7.53
18.87
23.15
18.06
15.53
10.22
23.32
23.39
10.47
23.13
11.98
1995
23.83
10.83
10.86
7.89
4.13
18.93
10.82
12.39
4.37
8.16
7.70
19.64
23.84
18.86
16.15
10.49
24.02
24.07
10.74
23.81
12.38
1996
24.52
11.24
11.16
8.08
4.03
19.77
11.23
12.58
4.29
8.35
7.88
20.24
24.54
19.40
16.65
10.90
24.73
24.75
11.15
24.51
12.74
1997
24.59
11.30
11.31
8.27
3.94
20.45
11.28
12.70
4.20
8.53
7.99
20.59
24.60
19.78
16.92
10.98
24.81
24.82
11.22
24.58
12.94
1998
24.89
11.37
11.44
8.36
3.88
20.40
11.36
12.62
4.15
8.61
8.03
20.75
24.91
19.93
17.05
11.07
25.13
25.12
11.30
24.88
12.99
1999
24.43
11.20
11.32
8.32
3.90
20.66
11.18
12.52
4.17
8.57
7.93
20.62
24.45
19.80
16.90
10.91
24.55
24.65
11.13
24.42
12.93
2000
23.63
11.09
10.92
8.00
3.97
20.21
11.07
12.18
4.22
8.25
7.74
20.09
23.65
19.32
16.55
10.82
23.76
23.84
11.02
23.62
12.64
2001
23.91
11.00
10.94
7.97
3.94
19.55
10.99
12.29
4.19
8.22
7.74
19.89
23.94
19.08
16.36
10.74
24.05
24.12
10.93
23.90
12.51
2002
23.82
10.93
10.88
7.91
4.00
19.41
10.92
12.28
4.25
8.17
7.75
19.76
23.85
18.97
16.26
10.65
23.98
24.02
10.86
23.81
12.46
Table A.3-Porest Service 25% payments to Washington counties 1974-1992. with projections to 2002 based on 10-year rolling average
(1991-2 adjusted for spotted owl guarantees)
County/
Clallam
Cowlitz
Jefferson
Kittitas
Mason
Pierce
Skamania
Thurston
Yakima
Acre
(519728
(32610)
(700461)
(413164)
(164866)
(124579)
(846995)
(622)
(504095)
Chelan
Clark
Grays H.
King
Lewis
Okanogan
Skagit
Snohomish
Whatcom
Total
(1441113)
(1180)
(149584)
(349467)
(446116)
(1499866)
(518633)
(631606)
(836277)
(918096
in million dollars
1974
0.82
0.97
0.01
0.12
0.03
1.32
0.70
0.32
2.27
0.31
0.78
0.27
0.38
4.63
0.70
0.00
0.66
1.18
15.49
1975
0.37
1.16
0.01
0.12
0.27
0.90
0.81
0.23
2.27
0.28
0.32
0.32
0.32
4.56
0.71
0.00
0.56
1.34
14.54
1976
0.80
1.19
0.01
0.12
0.37
1.61
0.87
0.35
2.34
0.12
0.73
0.34
0.67
4.70
1.07
0.00
2.03
1.43
18.76
1977
1.27
1.88
0.01
0.16
0.58
2.54
1.31
0.54
3.12
0.60
1.53
0.51
0.86
6.26
1.46
0.00
1.50
2.12
26.24
1978
1.36
1.88
0.01
0.20
0.58
2.53
1.07
0.52
3.75
0.59
1.26
0.41
1.12
7.74
1.58
0.00
1.97
1.84
28.41
1979
1.50
2.94
0.02
0.25
0.91
3.97
1.43
0.61
4.76
0.93
1.41
0.56
1.28
9.79
1.87
0.00
2.07
2.45
36.75
1980
0.93
2.95
0.01
0.16
0.91
3.99
1.44
0.47
3.20
0.94
1.56
0.56
1.14
6.36
1.75
0.00
1.84
2.30
30.50
1981
1.42
2.16
0.01
0.15
0.67
2.92
1.42
0.59
2.94
0.69
1.60
0.55
1.05
5.79
0.72
0.00
1.70
2.25
26.62
1982
0.32
1.38
0.01
0.10
0.43
1.87
0.85
0.22
1.91
0.44
0.40
0.33
0.95
3.82
1.30
0.00
1.57
1.36
17.25
1983
0.90
1.12
0.01
0.12
0.34
1.51
0.99
0.39
2.30
0.35
1.29
0.38
0.69
4.62
1.12
0.00
1.12
1.59
18.85
1984
1.34
1.58
0.01
0.14
0.49
2.13
1.07
0.51
2.74
0.50
0.62
0.41
1.03
5.55
1.46
0.00
1.67
1.75
22.99
1985
1.31
1.12
0.01
0.13
0.35
1.51
0.83
0.46
2.48
0.35
0.82
0.32
0.82
5.11
1.15
0.00
1.33
1.39
19.48
1986
2.37
1.53
0.01
0.20
0.47
2.07
1.25
0.79
2.89
0.49
1.09
0.45
0.77
5.93
1.31
0.00
1.24
1.95
24.78
1987
1.90
1.59
0.01
0.30
0.49
2.14
1.64
0.74
3.87
0.50
1.44
0.59
1.04
7.91
1.75
0.00
1.68
2.57
30.17
1988
2.29
2.35
0.02
0.44
0.72
3.17
1.76
0.86
5.46
0.74
2.26
0.63
1.35
11.42
2.09
0.00
2.18
2.89
40.64
1989
2.61
2.57
0.01
0.42
0.79
3.46
2.39
1.04
5.27
0.81
2.92
0.86
1.27
10.73
2.33
0.00
2.05
3.70
43.25
1990
2.28
1.82
0.01
0.33
0.53
2.46
2.00
0.89
4.24
0.58
1.34
0.72
1.05
8.61
1.93
0.00
1.70
3.06
33.56
1991
2.16
2.03
0.01
0.38
0.58
2.74
2.17
0.89
4.82
0.64
1.95
0.78
1.15
9.85
2.08
0.00
1.85
2.91
37.00
1992
2.06
1.78
0.01
0.31
0.51
2.40
1.74
0.79
3.90
0.57
1.63
0.61
0.99
8.04
1.72
0.00
1.59
2.67
31.34
1993
1.92
1.75
0.01
0.28
0.53
2.36
1.58
0.74
3.80
0.55
1.53
0.58
1.02
7.78
1.69
0.00
1.64
2.45
30.21
1994
2.02
1.81
0.01
0.29
0.55
2.44
1.64
0.77
3.95
0.57
1.56
0.59
1.05
8.09
1.75
0.00
1.69
2.53
31.34
1995
2.09
1.83
0.01
0.31
0.55
2.47
1.70
0.80
4.07
0.58
1.65
0.61
1.05
8.35
1.78
0.00
1.70
2.61
32.18
1996
2.17
1.91
0.01
0.33
0.57
2.57
1.79
0.83
4.23
0.60
1.74
0.64
1.07
8.67
1.84
0.00
1.73
2.73
33.45
1997
2.15
1.94
0.01
0.34
0.58
2.62
1.84
0.83
4.36
0.62
1.80
0.66
1.10
8.95
1.90
0.00
1.78
2.81
34.31
1998
2.18
1.98
0.01
0.34
0.59
2.67
1.86
0.84
4.41
0.63
1.84
0.67
1.11
9.05
1.91
0.00
1.79
2.84
34.73
1999
2.16
1.94
0.01
0.33
0.58
2.62
1.87
0.84
4.30
0.62
1.80
0.67
1.09
8.81
1.89
0.00
1.75
2.83
34.14
2000
2.12
1.88
0.01
0.32
0.56
2.54
1.82
0.82
4.21
0.60
1.68
0.65
1.07
8.62
1.85
0.00
1.72
2.75
33.22
2001
2.10
1.89
0.01
0.32
0.56
2.54
1.80
0.81
4.20
0.60
1.72
0.65
1.07
8.62
1.84
0.00
1.73
2.71
33.19
2002
2.10
1.87
0.01
0.32
0.56
2.52
1.77
0.81
4.14
0.59
1.69
0.63
1.06
8.50
1.82
0.00
1.71
2.70
32.81
Table A.4-Forest Service 25% payments/acre to Washington counties 1974-1992. with projections to 2002 based on 10-year rolling average
(1991-2 adjusted for spotted owl guarantees)
County/
Clallam
Cowlitz
Jefferson
Kittitas
Mason
Pierce
Skamania
Thurston
Yakima
Acre
(519728
(32610)
(700461)
(413164)
(164866)
(124579)
(846995)
(622)
(504095)
Chelan
Clark
Grays H.
King
Lewis
Okanogan
Skagit
Snohomish
Whatcom
Average
(1441113)
(1180)
(149584)
(349467)
(446116)
(1499866)
(518633)
(631606)
(836277)
(918096
in dollars per acre
1974
0.57
1.87
6.92
3.69
0.21
1.88
1.99
0.78
5.09
1.88
0.52
2.17
0.73
5.47
1.12
2.08
0.79
2.34
1.69
1975
0.26
2.23
6.82
3.63
1.78
1.29
2.33
0.55
5.08
1.69
0.21
2.54
0.62
5.39
1.13
2.42
0.67
2.67
1.58
1976
0.56
2.29
7.02
3.74
2.46
2.29
2.50
0.84
5.25
0.75
0.49
2.72
1.30
5.55
1.69
2.61
2.43
2.85
2.04
1977
0.88
3.61
9.33
4.89
3.87
3.62
3.75
1.29
7.00
3.62
1.02
4.08
1.65
7.39
2.32
3.91
1.80
4.20
2.86
1978
0.95
3.61
11.55
6.05
3.86
3.61
3.05
1.25
8.40
3.60
0.84
3.32
2.17
9.14
2.51
3.19
2.35
3.66
3.09
1979
1.04
5.66
14.60
7.66
6.06
5.67
4.10
1.48
10.67
5.66
0.94
4.47
2.47
11.56
2.96
4.31
2.47
4.86
4.00
1980
0.65
5.68
9.48
4.90
6.09
5.69
4.11
1.14
7.16
5.68
1.04
4.48
2.20
7.50
2.76
4.23
2.20
4.56
3.32
1981
0.99
4.16
8.64
4.46
4.45
4.16
4.06
1.43
6.59
4.16
1.06
4.42
2.03
6.84
1.14
4.24
2.03
4.46
2.90
1982
0.22
2.66
4.57
2.97
2.86
2.67
2.44
0.53
4.28
2.66
0.27
2.65
1.83
4.51
2.06
2.55
1.88
2.70
1.88
1983
0.63
2.15
5.53
3.60
2.30
2.15
2.83
0.94
5.17
2.15
0.86
3.08
1.33
5.46
1.77
2.94
1.34
3.16
2.05
1984
0.93
3.04
6.63
4.31
3.25
3.04
3.06
1.24
6.14
3.04
0.41
3.33
1.99
6.55
2.32
3.19
2.00
3.46
2.50
1985
0.91
2.15
6.11
3.97
2.31
2.16
2.36
1.12
5.56
2.15
0.54
2.58
1.58
6.03
1.82
2.47
1.59
2.75
2.12
1986
1.64
2.95
6.90
6.16
3.16
2.95
3.57
1.92
6.47
2.95
0.72
3.60
1.48
7.00
2.07
3.54
1.48
3.86
2.70
1987
1.32
3.05
9.20
9.35
3.27
3.05
4.70
1.79
8.68
3.05
0.96
4.74
2.01
9.34
2.77
4.72
2.01
5.09
3.29
1988
1.59
4.52
13.36
13.62
4.84
4.52
5.04
2.08
12.23
4.52
1.51
5.09
2.61
13.49
3.30
5.01
2.61
5.72
4.43
1989
1.81
4.94
12.54
12.78
5.29
4.94
6.85
2.51
11.82
4.94
1.94
6.91
2.45
12.67
3.69
6.88
2.45
7.35
4.71
1990
1.58
3.51
10.24
10.24
3.51
3.51
5.72
2.15
9.50
3.51
0.89
5.74
2.03
10.17
3.06
5.65
2.03
6.08
3.66
1991
1.50
3.91
11.69
11.69
3.91
3.91
6.22
2.14
10.80
3.91
1.30
6.24
2.21
11.63
3.29
6.14
2.22
5.78
4.03
1992
1.43
3.43
9.49
9.49
3.43
3.43
4.97
1.91
8.75
3.43
1.08
4.89
1.91
9.49
2.72
4.94
1.91
5.31
3.41
1993
1.33
3.36
9.17
8.52
3.53
3.37
4.53
1.78
8.51
3.36
1.02
4.62
1.96
9.18
2.68
4.55
1.96
4.86
3.29
1994
1.40
3.49
9.53
9.01
3.65
3.49
4.70
1.86
8.85
3.49
1.04
4.77
2.02
9.55
2.77
4.71
2.03
5.03
3.41
1995
1.45
3.53
9.82
9.48
3.69
3.53
4.87
1.93
9.12
3.53
1.10
4.92
2.03
9.86
2.82
4.86
2.03
5.18
3.50
1996
1.51
3.67
10.20
10.03
3.83
3.67
5.12
2.01
9.47
3.67
1.16
5.15
2.07
10.24
2.92
5.10
2.07
5.43
3.64
1997
1.49
3.74
10.52
10.42
3.89
3.74
5.27
2.02
9.77
3.74
1.20
5.31
2.13
10.56
3.00
5.26
2.13
5.58
3.74
1998
1.51
3.81
10.66
10.53
3.96
3.81
5.33
2.04
9.88
3.81
1.23
5.36
2.14
10.68
3.02
5.31
2.14
5.63
3.78
1999
1.50
3.74
10.39
10.22
3.87
3.74
5.36
2.04
9.65
3.74
1.20
5.39
2.10
10.40
3.00
5.34
2.10
5.62
3.72
2000
1.47
3.62
10.17
9.96
3.73
3.62
5.21
1.99
9.43
3.62
1.12
5.24
2.06
10.18
2.93
5.19
2.06
5.45
3.62
2001
1.46
3.63
10.16
9.94
3.75
3.63
5.16
1.97
9.42
3.63
1.15
5.19
2.06
10.18
2.92
5.14
2.06
5.39
3.62
2002
1.46
3.60
10.01
9.76
3.73
3.60
5.05
1.95
9.29
3.60
1.13
5.08
2.05
10.03
2.88
5.04
2.05
5.35
3.57
FOREST POLICY CENTER
1516 P STREET. NW WASHINGTON. DC 20005
(202)667-3300 FAX (202)667-7751
A Program of the American Forestry Association
FOREST POLICY CENTER
COMPONENTS OF A
FOREST CONSERVATION AND
ECONOMIC TRANSITION ASSISTANCE PLAN
FOR THE PACIFIC NORTHWEST
A Discussion Paper
FOREST POLICY CENTER
1516 P Street, NW
Washington, DC 20006
(202) 667-3300
FAX 667-7751
V. Alaric Sample
Director
May 12, 1993
CONTENTS
Acknowledgements
ii
Introduction
1
Summary
2
Land Stewardship Contracts:
Opportunities for Ecosystem Management and Employment
4
Stewardship Contracting East of the Cascades
to Mitigate Timber Supply and Employment Effects
of Spotted Owl Habitat Protection
11
Compensating for impacts on federal payments to counties
19
Private Land Relationships
in Forest Ecosystem Management
27
Interactive Use of GIS Technology
to Prioritize Late-Successional Forests of
Greatest Ecological Value
34
Elimination of Log Export Subsidies:
Effects on Timber Supply and Employment
39
Appendix A:
Federal payments to counties in Washington and Oregon, 1974-1992, with projections
to 2002 based on a ten-year rolling average (by total payments and per-acre
equivalent).
45
i
Acknowledgements
A number of individuals contributed important data and ideas to this discussion paper, and
helped us in our efforts to provide the most complete, accurate, and balance information and
analysis that could be provided within the time available. The Forest Policy Center would like
to express a special thanks to Richard Haynes, Chad Oliver, Dave Perry, Bruce Lippke, Jim
Geisinger, Chris West, Ron Kaufman, Mike Kerrick, John McMahon, Kass Green, Ken Osborn,
Kay Berg, Don Flora, Ross Gorte, Tom Wescott, Tom Tuchmann, and Dennis Le Master.
Among AMERICAN FORESTS and Forest Policy Center staff and board members who contributed
to the paper are Neil Sampson, Zane Smith, Gerry Gray, Perry Hagenstein, Lance Clark, and
Susan Stedfast. The views expressed are the author's and do not necessarily reflect those of the
contributors.
V. Alaric Sample
May 12, 1993
ii
Forest Policy Center
Page 1
Introduction
On April 2, 1993 in Portland, Oregon, President Bill Clinton, Vice President Albert Gore
and the heads of the departments of Agriculture, Interior, Labor, Commerce, OMB and EPA gave
their undivided attention to listening to the people of the Pacific Northwest and trying to
understand the controversy over habitat protection for the threatened northern spotted owl. Not
since the days of Theodore Roosevelt has a sitting president so dedicated his own time and that
of his senior Administration officials to an issue of forest conservation. In Roosevelt's day, the
talk was of sustained-yield forestry, and of halting the overexploitation of forest resources that
threatened the supply of timber for a rapidly expanding nation. In Clinton's day, the talk has
evolved to the protection and sustainable management of forest ecosystems, managing our forest
resources in a way that is simultaneously ecologically sound, economically viable, and socially
responsible.
Regionally, nationally, and internationally, conservation and economic interests that have
traditionally opposed one another have begun to recognize that a healthy environment and a
healthy economy are not mutually exclusive, but are mutually dependent. Over the long term,
it is not possible to sustain one without sustaining the other. In this new awareness, President
Clinton has challenged us all to begin crafting a balanced, workable solution to one of the most
difficult and seemingly intractable resource management issues of our time, and to create the
political consensus that will be crucial to its successful implementation.
Following the Forest Conference in Portland, President Clinton ordered federal officials
to develop a plan of action for his review by June 1, 1993 and articulated five key principles to
guide their work:
1.
Remain cognizant of the human and economic dimensions of the problem. Where sound
management policies can preserve the health of forest lands, timber sales will go forward;
where this requirement cannot be met, the plan must offer new economic opportunities
for year-round, high-wage, high-skill jobs.
2.
Protect the long-term health of our forests, wildlife, and waterways, holding them in trust
for future generations.
3.
Actions must be "scientifically sound, ecologically credible, and legally responsible."
4.
Produce "a predictable and sustainable level of timber sales and non-timber resources that
will not degrade or destroy the environment."
Forest Policy Center
Page 2
5.
Make the government work together, ending the gridlock within the federal government
through insistence on collaboration, not confrontation.
To accomplish this and develop the Administration plan, three "working groups" were
established:
An Ecosystem Management Assessment working group was established to "identify
management alternatives that attain the greatest economic and social contribution from
the forests of the region and meet the requirements of the applicable laws and regulations,
including the Endangered Species Act, the National Forest Management Act, the Federal
Land Policy and Management Act, and the National Environmental Policy Act."
A Labor and Community Assistance working group is to address the forests' role in
regional economic development and diversification, "accommodating properly functioning
markets and facilitating the transitions inevitable in the modern global economy." A
program to assist communities and displaced workers is to be developed not to dictate
preferred paths for economic development but to "build upon the independence and
strength of these communities and their residents and provide them with the tools needed
for economic revitalization based on their own needs and on potential new opportunities
in forest-related employment."
The charge for the Agency Coordination working group recognizes that interagency
coordination "becomes even more critical as we move toward an ecosystem approach to
forest management where a number of agencies must be involved in planning and
implementing a management strategy," and requires the development of a plan to improve
the working relationship among federal and state agencies in the region and eliminate
impediments that block coordinated action.
Summary
The following discussion paper offers a brief background and analysis of six key
components of a forest conservation and economic transition assistance plan for the Pacific
Northwest that is consistent with the principles articulated by President Clinton. AMERICAN
FORESTS and the Forest Policy Center strongly support the President's principles as consistent
with those that have guided our own organization's efforts in forest conservation since its
founding in 1874. To briefly summarize the major points of the discussion paper:
The use of land stewardship contracts in place of conventional timber sales offers
opportunities for accomplishing needed resource management and ecosystem restoration
activities, contributing as much as 3.2 billion board feet annually (for the next ten years)
to the Pacific Northwest timber supply, and generating as many as 52,000 jobs in forest
products and related employment. Work would be financed through a credit arrangement
and would not affect federal budget outlays.
Forest Policy Center
Page 3
Ecosystem restoration actions are needed east of the Cascades in the Blue Mountains and
in Northeastern Washington to reduce the risk of catastrophic wildfire, and to repair
watersheds and restore the natural dynamics and resiliency of fire-dependent forest
ecosystems. In the near term, these activities could generate more than 500 million
board feet of timber annually and support approximately 8,000 jobs in forest products
and related industries.
The expected decline in timber harvesting on federal lands will have a major impact on
federal revenue sharing with local governments, which is currently based on a portion
of federal timber receipts. Shifting to a formula based on federal land area in each
county, with payments based on a rolling ten-year average during a five-year
transition period, would fairly compensate local government for lost taxes due to tax-
exempt federal land ownership and provide a high level of income that is far more stable
and predictable than that based on cycling timber harvest levels and prices.
Private forest lands can play an important complementary role to public forest lands
in an ecosystem-based strategy to protect late-successional forest habitat for the spotted
owl as well as other species that might otherwise become threatened or endangered in the
future. It is important to identify and eliminate the disincentives that now exist for
closer cooperation with adjacent public and private forest landowners, without
undercutting the economic purposes for which private organizations and individuals own
and manage their forest land.
Income tax-based federal log export subsidies give foreign log buyers a competitive
advantage over domestic purchasers, requiring a domestic buyer to offer a price at least
7 percent higher in order for the log seller to receive the same after-tax income as selling
to a foreign buyer. Elimination of this subsidy could re-route approximately 250 million
board feet annually back to Pacific Northwest mills, sustaining at least 1,000 jobs that
otherwise would be lost. In addition, it would save an estimated $100 million annually
that the federal government could apply to economic transition assistance programs in the
Pacific Northwest.
Recent rapid advances in remote-sensing and geographic information systems (GIS)
technology have made possible the development of better ecological information on the
extent, location, and nature of old-growth forests than existed even when the "Gang of
Four" analysis was performed. Use of GIS technology and improved information in
a setting that allows open and direct interaction among scientists and stakeholders may
uncover alternatives that are as yet unknown and untried. This approach should be an
explicit part of the planning process, and sufficient funds and other resources should be
made available to ensure its success.
Forest Policy Center
Page 4
Land Stewardship Contracts:
Opportunities for Ecosystem Management and Employment
A new approach to timber sale contracting offers opportunities to accomplish needed
ecosystem management and ecological restoration activities in the Pacific Northwest, while at the
same time providing additional employment in the forest-products and related industries in local
communities. Land stewardship contracting fosters the integrated resource management approach
central to the purposes of the National Forest Management Act (NFMA) and the Federal Land
Policy and Management Act (FLPMA); such an approach is now even more important in order
to effectively and successfully implement forest ecosystem management policies on federal
lands.
1
For the purposes of the economic transition assistance plan for the Pacific Northwest
forests affected by the need to protect old-growth habitat, land stewardship contracting can
provide employment opportunities for woodsworkers in and around their own communities with
little or no retraining necessary. Financing this work from current income to the federal land
managing agencies can help minimize the impact of the economic transition assistance package
on the federal budget deficit.
Background
The FY 1992 and FY 1993 appropriations bills for the Forest Service directed the agency
to test a new approach to federal timber sale contracting on several western national forests. This
approach, termed "land stewardship contracting," authorized the Forest Service to "apply the
1
National Forest Management Act, 16 U.S.C. 1600; Federal Land Policy and Management
Act, 43 U.S.C. 1701.
Forest Policy Center
Page 5
value of a reasonable portion of the value of timber removed
as an offset against the cost
of stewardship services received including, but not limited to, site preparation, replanting,
silviculture programs, recreation, wildlife habitat enhancement, and other multiple-use
enhancements."2 The stewardship contracts were to be used "to help the private sector promote
the Forest Service ecosystem management initiative
[and] to give contractors an incentive
to become as concerned with sustaining ecosystems as with sustaining trees."3
In terms of procedure, this system would allow the Forest Service to contract for an array
of ecosystem management and ecological restoration services as part of a total land management
"package deal" with a single contractor. The contractor would be compensated for these services
by receiving credit toward the amount owed to the Forest Service for timber harvested as part
of the contract activities. This approach is essentially the same as the "purchaser credit" system
used for many years to compensate timber purchasers for road construction and maintenance
associated with a timber sale.4
The idea of land stewardship contracts has been well received by the Forest Service,
particularly at the field level where closer integration of all land management activities is seen
as a key not only to better resource management but greater program effectiveness and cost
efficiency. National forest plans, developed pursuant to NFMA, are developed using an
integrated resource management approach.
But integration is made difficult in the implementation of these plans by the function-by-
function organizational structure of the agency (timber, recreation, wildlife, range, etc.) and by
the disintegration of planned integrated resource management projects that takes place during
2
Congressional Record, Senate, September 13, 1991, p. 12973.
3
Ibid.
4
National Forest Roads and Trails Act, 16 U.S.C. §§ 532-538.
Forest Policy Center
Page 6
the annual budgeting and appropriations process.⁵
A
1988
GAO
evaluation
of
a
Congressionally-authorized Forest Service pilot project testing an integrated "end-results"
approach to Forest Service appropriations found that program accomplishments for all resources
improved while overall costs were reduced. GAO observed further that this approach would help
the Forest Service carry out the forest plans mandated by Congress and would facilitate greater
agency accountability for appropriations.6 Despite this positive independent assessment,
Congress has not taken necessary action to expand end-results budgeting beyond the few national
forests that participated in the original pilot program.
Results to date of stewardship contract pilot study
Preliminary results of the land stewardship contracts pilot study have also been positive,
and in the Forest Service's FY 1993 appropriations the number of pilot forests was expanded to
include the Kaibab (AZ), Coconino (AZ), Dixie (NV), Idaho Panhandle (ID), and Lake Tahoe
(NV). Congress has asked the Forest Service to study how receiving services in lieu of revenue
would affect the agency's adherence to other laws relating to contracting and to revenue sharing
programs. Because services under land stewardship contracts would be credited against what
purchasers would normally pay for the timber they remove, Congress has been particularly
interested in how this would affect the 25 percent of Forest Service receipts that are normally
paid to counties in lieu of taxes.⁷ There was similar concern over the purchaser credit system
used for road construction, which was resolved by adding the value of the foregone timber
receipts to the amount on which the calculation of the 25 percent payment to counties is based.
5 Sample, V. Alaric, The Impact of the Federal Budget Process on National Forest
Planning (Westport, CT: Greenwood Press, 1990).
6
U.S. Controller General, Forest Service: Evaluation of "End-Results" Budgeting Test,
GAO/AFMD-88-45 (Washington, DC: U.S. General Accounting Office, 1988).
7
Twenty-Five Percent Fund Act of 1908, 16 U.S.C. 500.
Forest Policy Center
Page 7
Serious consideration should be given to developing a means other than payment of a
share of timber receipts to compensate local government for the tax-exempt status of federal
lands (see section on Compensating for Impacts on Federal Payments to Counties). This is just
one example of where the existing linkage between federal revenue sharing and timber harvest
levels on federal lands has become an impediment to land use and policy changes that are in the
public interest. Breaking this linkage and putting federal payments to counties on a land area
basis will give the counties a more even and reliable source of income and will take local
government out of the position of pressuring for unsustainably high timber harvest levels simply
to maintain income based on a portion of the receipts. This existing approach has been a
continuing restraint on the implementation of an integrated resource management approach on
federal forest lands as specified in NFMA and FLPMA. An ecosystem-based approach to forest
management requires an even higher level of integrated resource management. The formula for
compensating local government for lost property taxes should not, need not, and cannot continue
to be an obstacle to crucial changes in land and resource management on the federal lands.
For the purposes of the economic transition assistance plan for the Pacific Northwest
forests affected by the need to protect old-growth habitat, land stewardship contracting can
provide employment opportunities for woodsworkers in and around their own communities with
little or no retraining necessary. Forest management experts at the University of Washington and
Oregon State University have identified a substantial need for reforestation, thinning and other
silvicultural treatments that would produce a considerable volume of second-growth timber for
Pacific Northwest mills and provide significant employment opportunity for workers whose jobs
are threatened by the decline in old-growth timber harvesting.
Timber supply and employment effects of stewardship contract opportunities in the Pacific
Northwest
Many public and private forests west of the Cascades contain an overabundance of
established second-growth stands in need of actions such as thinning in order to grow to other
Forest Policy Center
Page 8
structures important for a diversity of habitats.⁸ In the absence of such actions neither managed
nor preserved forest areas are likely to achieve biodiversity goals. Managed areas will primarily
contain dense young stands that discourage both structural and species diversity. Geographically
isolated preserved areas will contain primarily old-growth until major natural disturbances occur,
after which the older structures will be lost for many years.9
The anticipated annual volume from thinning opportunities alone in western Oregon and
western Washington is estimated at more than 3.6 billion board feet (BBF) per year. In Oregon
alone, there are commercial thinning opportunities in stands 20-150 years old on public,
corporate, and non-industrial private lands that could generate a merchantable volume of more
than 3.2 BBF per year during the next ten years.¹⁰ This conservative estimate assumes that less
than 60 percent of the stands that could be thinned would actually be thinned, and that 40 percent
or less of the volume will actually be removed for processing into wood products. In
Washington a similar conservative approach to estimating timber volumes from commercial
thinning just in stands 10-30 years old suggests that nearly 430 million board feet per year would
be available.¹¹
At the current estimate of 9.3 direct forest industry jobs per million board feet of timber
harvested, this could mean continued employment for nearly 33,480 timber workers now
threatened with layoffs. If indirect and induced employment is considered (an additional 5.7 jobs
8 Oliver, C. 1991. Thinning and pruning 10-30 year old plantations in western
Washington: Investment, social, wood supply, and environmental consequences. Report to
Governor's Timber Team, Timber Committee, State of Washington.
9 Oliver, C., Testimony before the House Committee on Agriculture, Subcommittee on
Forests, Family Farms, and Energy, March 11, 1992.
10 Perry, D., Oregon State University, personal communication, May 3, 1993. These
estimates are based on the International 1/4-inch log rule, which provides a more accurate
conversion of cubic foot volume to board feet for smaller diameter logs. Estimates based on the
Scribner log rule would be somewhat lower.
11 Oliver, C., University of Washington, personal communication, May 4, 1993.
Forest Policy Center
Page 9
per MMBF), this could translate to a total of as many as 54,000 jobs in Pacific Northwest
communities.
Financing stewardship contracts
Financing this work from current income to the federal land managing agencies can help
minimize the impact of the economic transition assistance package on the federal budget deficit.
Economic assistance will be needed by the people and communities of the Pacific Northwest
during this period of transition to a sustainable regional economy, with a healthy, stable forest
industry based on the management and utilization of second-growth forests. This assistance,
generally discussed in terms of loan guarantees and vocational training, is both appropriate and
necessary to moderate the effects of a major economic adjustment, particularly in rural
communities. Such programs are likely to require significant federal outlays at a time when
reducing the federal budget deficit is the foremost domestic policy priority of the Administration.
The inclusion of stewardship contracts as one component in an overall economic transition
assistance plan can efficiently reach the most heavily affected individuals and communities with
immediate employment opportunities with little or no direct federal outlay. The purchaser credit
program, used by the Forest Service to obtain road construction and maintenance services on
nearly every national forest in the country, provides one model for using timber receipts to offset
the cost of stewardship activities. The needed construction services are specified as an integral
part of a federal timber contract describing the volume and estimated value of the timber to be
sold. On most national forests, these integrated contracts are then sold in an open competitive
bidding process that assures the federal government of a fair market value for both the timber
sold and the services received.
Resource management and ecological restoration services could be provided either directly
by the contractor or by one of the many subcontractor firms, specializing in reforestation,
thinning operations, stream habitat improvement or other activity, that are likely to spring up in
response to new opportunities through stewardship contracting. Small and large timber purchaser
Forest Policy Center
Page 10
firms have already expressed an strong interest in bidding on stewardship contracts to perform
an array of resource management and ecological restoration activities to be specified by the
Forest Service. Stewardship contracts would be available and attractive to the very firms that
face declining prospects due to old-growth habitat protection, primarily in historically timber-
dependent, rural communities. The employment opportunities these contracts represent would
require little or no immediate retraining of woodsworkers, or relocation from their home
communities.
Accomplishing needed resource management and ecological restoration work through
stewardship contracts offers the prospect of significantly moderating the impact of old-growth
habitat protection at relatively low cost, targeting the employment benefits to rural communities
that need it most, when they need it, and using the existing skills of individuals most affected
by the habitat protection decision. Stewardship contracts deserve careful consideration as one
component of an overall economic transition assistance plan for the Pacific Northwest.
Forest Policy Center
Page 11
Stewardship Contracting East of the Cascades
to Mitigate Timber Supply and Employment Effects
of Spotted Owl Habitat Protection
In light of the reduced timber availability on the coastal Cascade public forests due to the
controversy over management of the remaining old growth, the loss of jobs in the region, the
high price of timber (even low-quality timber) throughout the west, and the need for forest
treatment in the inland forests, a five-year transition strategy could contain one element that
streamlined the process of instituting forest health projects in the inland forests, along with
incentives for coastal-area workers and companies to undertake the work involved.
Background
The coniferous forests lying east of the Cascade spine, and in the Sierra region of
California are, in many places, in serious need of effective management treatment. The forests
are very diverse, so generalizations should be avoided, but many sites occupied by Ponderosa
Pine, either alone or in combination with other conifers such as Western Larch, Douglas-fir, and
the true firs, show significant stress due to improper species balance and overpopulation of trees
per acre. Ecologists attribute this situation to a variety of causes, including removal of the high-
value and largest trees in early logging, a wet period in the first part of the 20th Century that
may have allowed moist-site species such as fir to invade sites normally more suited for pine
and larch, and aggressive fire protection in the past half-century that kept small trees and fire-
intolerant species from being "weeded out" of these forests.
As the trees have grown larger and more dense, a drought cycle in the past decade has
exacerbated moisture and nutrient stress in overcrowded stands. Opportunistic insect and disease
populations have soared, and large areas of dead and dying trees have resulted. In some stands,
this timber holds significant economic value if harvested within 1-3 years after mortality;
Forest Policy Center
Page 12
thereafter the economic value drops off rapidly. Allowed to remain on site, this dead timber
presents a huge fuel load which, if ignited, can result in uncontrollable wildfires that do major
ecosystem damage because of the abnormally intense heats generated.
Where these forest areas burn, a new even-aged management cycle must begin again,
often on soils and sites that have been degraded by the effects of intense fire. Where these
stands can be treated while a fair component of trees still remain alive, it is possible to begin a
new management system (now increasingly called ecosystem management) that focuses on ways
to retain the forests in healthy, dynamic, diverse conditions. Such treatments will provide jobs,
produce timber products, and restore forests to improved condition.
The needed treatment projects are not now being done, however. For example, the
Northeastern Washington National Forest Health Report says that, "on the three national forests
in northeastern Washington, about 2,980,000 acres are at risk of death from insects, disease and
wildfire. Salvage and green timber sales, thinning and related activities, and reforestation
programs deal with about 26,000 acres of susceptible lands annually under existing budgets."
Obviously, this 100-year+ rotation is not going to meet the forest health needs of those forests.
One reason seems to be the lack of both programs and budgets within the agencies for
effectively planning and implementing forest health-related treatments. The agencies rely heavily
on timber sales, both salvage sales after mortality and green sales of merchantable logs, as their
major silvicultural treatment device. This makes it difficult to plan and pay for the large amounts
of work needed that are not directly related to the removal of merchantable timber, because there
is no direct source of funds or program support to pay for such work. The emphasis on timber
sales has also generated great public skepticism which makes it difficult for resource managers
to propose other types of treatment without great public cynicism about it being a "clearcut in
disguise." That skepticism, particularly as it has resulted in cumbersome planning, review, and
timber sale processes, can extend the time and costs involved to the point where many projects
are infeasible.
Forest Policy Center
Page 13
In particular, clearcutting as a timber harvest method meets with high public opposition.
In some of these public forests, a significant amount of private timber has been clearcut in recent
years, and much of the landscape has been significantly affected. Additional clearcutting on the
interspersed public lands is both technically and politically questionable.
On some of the hardest-hit forest regions, such as the Blue Mountains of Eastern Oregon,
intensive ecosystem evaluations have been done and forest restoration plans prepared. Those
plans focus on restoring forest sites through a combination of practices designed specifically for
each condition, including:
Removal of salvageable dead timber;
Thinning of green stands where needed;
Pruning of dead or lower limbs where needed to reduce the risk of ground fires
climbing these "ladder fuels" into tree crowns, as well as to improve the ultimate
quality of the wood produced;
Prescribed burning to reduce excessive fuels, break up large areas of wildfire-
susceptible conditions, and create habitat diversity;
Removal or treatment of forest roads to reduce runoff, erosion, and sedimentation
of streams, or to reduce human access into critical wildlife habitat or use patterns;
Restoration of ecosystem structure in riparian zones; and,
Tree planting in unregenerated or understocked stands.
Other public forest areas, such as eastern Washington and northern California, are
currently undergoing similar study and plan preparation. Forests in Idaho have been most
seriously affected at the southern, drier end of the state. On the Boise National Forest, for
example, so much forest has been killed in recent years that all current timber sales are salvage
of dead timber, and the workload is so extreme that it has not been possible to begin preventative
work on stands that could be saved through effective treatment. Formal plans for treatment
project needs have not been prepared on the Idaho forests, however.
Forest Policy Center
Page 14
Forest Health Projects Versus Timber Sales
A major factor in this policy proposal would be to replace, for a five-year test and
transition period in the affected western forests, most or all of the normal timber sales with forest
health treatment projects. These projects, while they could produce large amounts of
merchantable timber, would be designed and implemented to achieve a more desirable forest
condition, and to help managers facilitate the transition to ecosystem management on these sites.
A stewardship contracting approach, as described in the previous section, could be used
to accomplish the necessary ecological restoration activities. The project plans would identify
the forest treatment work needing to be done, and establish a bid basis to set fair market prices
for carrying out the work. They would also estimate the type and amount of merchantable timber
or other material likely to be produced during the treatment work, and establish a bid basis to
set fair market prices for that material. A fair method of reimbursement, such as is currently
used for purchaser-credit road building in timber sales, should be established which assures fair
and equitable treatment for both the government and the contractor.
To remove the "spike" that these sales would put into payments to some counties during
this transition period, payments to the states and counties should be stabilized for the transition
period by taking a rolling average of the past 10 years of payments to each county, normalized
for inflation, and making that the annual payment for the transition period, regardless of volume
removed.
The contracts to implement these projects will almost certainly need to be multi-year in
length, with final approval and payment to the contractor based on achievement of the end results
agreed to in the stewardship contract. As opposed to straight sale of timber, these projects should
be heavily based on effective performance. Many tasks, such as prescribed burning, depend on
weather conditions that may or may not be available in a given year. Others, such as tree
planting or riparian area restoration, may take 2-3 seasons to judge whether or not they have
succeeded. Where it is in the contractor's financial interest for the project to succeed, as opposed
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to simply "doing the work," it creates a significant difference in the type of performance, as well
as the oversight costs of the administering agency.
Implementing the Policy
An Administration proposal for a five-year program should include the following
elements:
Immediate funding to accelerate implementation of the Blue Mountains
Restoration Project;
Start-up funding to begin implementation of the Eastern Washington and Sierra
Forest Restoration Projects when plans have been completed and approved;
Funding to begin a forest health study and restoration proposal for Idaho public
forests, with an intense public participation process similar to the Blue Mountains
Restoration Study;
Streamlining the planning and implementation process by directing the agencies
to prepare NEPA documents and carry out public participation processes with
plans developed in sufficient detail at the landscape or ecosystem level to illustrate
the end-results objectives desired in each affected ecosystem, then allowing
project-level implementation of approved plans to proceed without further NEPA
review or appeal;
Approval for all national forests in Washington, Oregon, California, and Idaho to
utilize the multi-year stewardship contracting authority granted to 5 pilot forests
in the FY93 appropriations bill for the Forest Service; and,
Pooling and dedication of all federal timber and salvage sale revenues in the
affected region into support for the planning and implementation of forest health
treatment projects on both NFS and BLM forest lands for the 5-year transition
and test period.
In preparing plans for forest health treatment projects, federal land managers should be
instructed to:
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Place first priority on areas that need treatment which are located near population
centers, which have road access, and where treatment can be less controversial,
more quickly started, and more likely to help prevent disastrous impacts from
wildfires or floods.
Utilize private consultants where needed to supplement agency technicians and
accelerate the process of carrying out stand assessments and the development of
treatment plans;
Develop monitoring plans that begin with, go through, and follow up each
treatment project to provide information on the effectiveness of projects in
reaching the end results sought; and
Utilize local organizations, non-profits, universities, or private consultants where
appropriate in the monitoring program, both to gain the necessary staff and to
broaden the public understanding and trust of the process.
Potential Impacts
1. The Blue Mountains Restoration Strategy
Implementation of the three-year strategy would result in, among other treatments:
Prescribed burning
355,000 acres
Biomass Removal
6,050 acres
Harvest
180,000 acres
Reforestation
90,000 acres
Estimated timber harvest:
200-267 million board feet per year
Estimated employment impact:
1,940-2,587 direct jobs
1,060-1,413 indirect jobs
Estimated costs:
$247 million
Estimated returns:
$100-200 million (These returns may
be low, in light of current economic
conditions. See below.)
Annual savings (wildfire suppression)
$4.3 million/year (for 20 years)
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2. The Northeastern Washington Restoration Strategy
Implementation of the forest health projects called for in the February, 1993, report would
result in, among other treatments:
Prescribed burning
368,000 acres
Tree Density and Growth Management
65,346 acres
Harvest
110,750 acres
Reforestation
44,696 acres
Estimated timber harvest:
295 million board feet per year
Estimated employment impact:
2,865 direct jobs
1,565 indirect jobs
Income:
$829 million (over 3 years) (See
below.)
Annual savings (wildfire suppression):
$1.7 million/year (for 20 years)
Short-term Economic Opportunity
The northwest timber market has been significantly impacted by market forces, including
the reduction in old-growth timber harvest due to court injunctions, the export of logs, and the
recovery in the housing market. Without entering the argument over why the current prices are
high, or trying to predict how long such prices can last, it is evident that a short-term opportunity
exists. That can be judged by looking at the Boise National Forest timber sales record for the
past few months.
The Boise National Forest was hit by a large wildfire in the late summer of 1992. A
major salvage sale program already under way due to huge areas of insect-, drought- and fire-
killed forests was expanded to salvage as much merchantable timber as possible from the
Foothills disaster. The resulting sales in FY 1993 have set new records for timber prices on the
forest, with Ponderosa Pine going for $622/thousand board feet in one sale. To date, the Boise
has sold 139 million board feet for $48,765,753, an average of $350.56/thousand board feet
across all species and grades. This represented almost a doubling of the timber staff's appraisal,
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which totalled $27.6 million for these timber values.
While the high prices received on these sales may be due in part to the Forest's alacrity
in getting fire-killed timber onto the market before its value declined through decay, it must also
be considered that the timber economy on the west coast played a major role. Several Oregon
firms travelled to Boise to bid on these sales and, for the first time in history, two Oregon firms
were successful bidders. Clearly, the effects of the Pacific Coast old-growth transition are being
felt 400 miles or more inland.
While the high prices and demands for inland-west timber have been decried by some
as "moving the problem to the east side," many see it as a major boon for forest management.
To sell fire-killed, otherwise dead, or stressed timber at a price which can help offset the costs
of needed forest improvements is an economic boon seldom, if ever, experienced by forest
managers in this region. With no way to predict how long this level of demand and price will
last, it seems only sensible to do everything possible to accelerate the execution of needed forest
health improvement projects while the market is strong. In so doing, forests can be improved,
jobs created, and economic health improved simultaneously.
For the forest-industry families and businesses on the western slope of the Cascades, a
relocation to work in the forest health projects of the inland west may be traumatic and difficult.
It seems less traumatic, however, than the total loss of economic opportunity, or the need to re-
train into totally different areas of work. After the west-side old growth harvests have been
proscribed, and the west-side second-growth opportunities captured, the inland forest health
opportunities may provide an essential economic opportunity for many families and businesses.
Capturing that opportunity through an intensive 5-year program of facilitating forest health
project planning and implementation on federal forests of the region seems a very low-cost,
high-payback policy option.
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Compensating for impacts on federal payments to counties
As timber harvests on the west side of the Cascades in Oregon and Washington decline,
so too will the federal revenue sharing with states and counties, currently calculated as a portion
of federal timber receipts. In some counties in western Oregon, these revenue-sharing payments
constitute more than two-thirds of the annual budget, and a sudden loss of this income would
put county governments in dire financial straits, just at the time when local social services are
in greatest demand. Any federal plan for easing the major economic transition taking place in
timber-dependent communities in the Pacific Northwest must address the need of county
governments for an adequate and reliable income from federal payments-in-lieu-of-taxes during
this period.
One option that should be considered in the Administration's economic transition plan for
the Pacific Northwest "owl region" is changing the formula by which the payments are
determined from one based on a portion of timber receipts to one based on the area of non-
taxable federal land in the county and the tax revenue it would generate in private ownership,
regardless of the current or planned allocation and use of the federal land and resources. This
could be accomplished gradually over a five-year transition period to minimize fluctuations or
disruptions in this heavily relied upon source of local government income.
Background
Both the Forest Service and BLM pay a portion of their timber sale receipts to counties
in which federal forest lands are located to compensate for the loss of property taxes that would
be levied were these lands privately owned. Since 1908, the Forest Service has been paying 25
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percent of receipts.¹² Later amendments made sure that the counties also received 25 percent
of deposits, such as those made under the Knudson-Vandenberg Act, and of payments-in-kind,
such as the value of roads constructed by timber purchasers. BLM returns 50 percent of receipts
to counties in western Oregon where the O&C lands are located.
Congress added a payments-in-lieu-of-taxes program in 1976 to reimburse local
governments for taxes on federal lands that produce few or no revenues. This law provides that
local governments get the higher of seventy-five cents per acre reduced by revenue sharing
payments, subject to a cap based on population, or a flat ten cents per acre. This means that
national forest counties receive up to seventy-five cents per acre in addition to the regular 25
percent share of timber sales and other revenues.¹³
These payments are a significant source of income to western Oregon and western
Washington counties. In 1991, a total of $178 million was paid to local government in Oregon
and Washington, the vast majority of it to counties west of the Cascades. In some rural counties,
such as Douglas county in southwestern Oregon, these payments constitute two-thirds of the
entire county budget.
A number of serious drawbacks have been recognized with this approach to determining
federal payments to counties, including problems of distributional equity and obstacles to the
sustainable management of forest ecosystems. More than two decades ago, the Public Land Law
Review Commission determined that the pattern for sharing federal receipts with local
government bears little relationship to the burdens imposed on them by the immunity of federal
lands from taxation. In areas with high timber values, the federal government pays counties
significantly more than they would receive if the lands were in private ownership. Conversely,
federal lands with low timber values return significantly less to counties that they would in
12 16 U.S.C. 500.
13 Hagenstein, P., personal communication, March 15, 1993.
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private ownership. This is illustrated in Table 1 with examples from the Willamette National
Forest (Oregon), the Talladega (Alabama), and the White Mountain (New Hampshire) comparing
the current payment structure with what tax revenues would be if the lands were in private
ownership.
Table 1. Comparison of payments to counties from four national forests under the current formula against estimated tax
revenue were these lands in private ownership
Average
Local taxes per acre:
National
receipt
Payments per acre:
Yield tax
Forest
per acre
25% Fund
PILT
Total
%
Amount
Land
Total
Willamette
119.80
29.95
.10
30.05
6.5
7.79
1.00
8.79
Talledega
8.80
2.20
.10
2.30
8.0
.70
1.00
1.70
White Mountain
3.00
.75
.10
.85
10.0
.30
1.00
1.30
Even within western Oregon alone there are significant distributional inequities in federal
revenue sharing. On the Coos Bay Wagon Road lands, an area administered by BLM, the federal
government has paid an average of less than $6 per acre over the past ten years, based on an
equivalency to private property tax and timber severance tax. During the same period, the Forest
Service paid counties an average of about $20 per acre of national forest land, and BLM paid
more than $40 per acre on the O&C lands.
This linkage between timber receipts and county payments has placed local governments
in the position of pressing Congressional representatives to set annual federal timber sale targets
at the highest possible level in order to maintain the level of federal payments and to minimize
fluctuations in this income from one year to the next.¹⁴ Timber sale targets established in
14 Sample, V.A., "What's Really Driving National Forest Management," American Forests,
January/February, 1989.
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annual appropriations for the Forest Service and BLM have often exceeded those requested by
the agencies themselves. In many cases, local governments are placed in a position of advocating
for the short term what might be against the region's interests in the longer run. Local
economies, like a portfolio of investments, are more stable and productive when they are based
on a wide diversity of activities rather than just a few. This is especially true if one of the major
local industries is inherently cyclical, highly sensitive to fluctuating interest rates, or locally on
the decline.
Local governments west of the Cascades have recognized this, but have been unwilling
to risk a drop in income from shifting to a different basis for payments-in-lieu-of-taxes.
Indications have been clear for some time that the PNW would experience a major decline in
timber supply beginning in the early 1990s. Economic studies as long ago as 1963 predicted a
depletion of the region's old-growth timber volume during the 1990s, with significantly lower
timber harvests for several subsequent decades until the youngest of the second growth timber
reached merchantable size.¹⁵ The land and resource management plans developed for each
national forest following the passage of the National Forest Management Act in 1976 called for
a one-quarter reduction in allowable harvest levels from the 1980s to the year 2000. Various
habitat conservation plans for the northern spotted owl have called for further reductions in the
volume harvested from federal forest lands.
With federal timber sales almost certain to fall sharply from recent levels and remain
relatively low for several decades, it is time to reevaluate the current approach. The counties
affected by habitat conservation plans for the northern spotted owl are under a temporary
legislative arrangement which maintains payments at average for 1986-1990, a period of both
high timber harvest levels and high timber prices. The current arrangement expires at the end
of FY 1995, however, and a longer term solution will be needed.
15 See Sample, V. and Le Master, D., Assessing the Employment Impacts of Protecting
Habitat for the Northern Spotted Owl (Washington, DC: American Forestry Association, 1992).
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Determining federal payments to counties on the basis of land area
The economic transition plan for the Pacific Northwest should include a provision for
maintaining federal payments to the affected counties at no less than a ten-year rolling average,
county by county, during the next five years, after which payments would be based on the area
of national forest land in the county and equivalent to what would be expected if the lands were
in private ownership.
A rolling ten-year average would extend the basis for calculation back to the mid-1980s,
a period of record high federal timber harvests and receipts. During the five-year economic
transition period, this would maintain payments to counties at a significantly higher level than
could be expected under either the existing timber receipts formula or a formula based on private
tax equivalency. In addition, the level of payments would become far more stable and
predictable (Figure 1 and Appendix A), simplifying local government budgeting and facilitating
better long-term planning for capital investments in schools, roads, and other local public works
projects. Any significant change in payments associated with the shift to a tax equivalency basis
would take place gradually, providing time for adjustment in local government budgeting and
providing substantial additional income to the counties during the economic transition. The
rolling average would be calculated on a county-by-county basis.
At the end of the five-year economic transition period, the formula for determining
federal payments-in-lieu-of-taxes would revert to an equivalent to the combination of property
and timber severance taxes levied on private forest landowners in the county. A precedent for
this approach exists on BLM's Coos Bay Wagon Road (CBWR) lands in southwestern Oregon.
The assessed value of forest land for property tax is a function of the price of second-growth
Douglas-fir stumpage over the previous three-year period. Severance tax is 6.5 percent of the
value of the timber harvested. Between 1984 and 1988, the CBWR lands in Roseburg County,
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Oregon yielded $59,935 in severance tax and $18,321 in property tax annually for 13,924
acres.¹⁶
Since perhaps a third of the payment is based on federal land acreage in the county,
independent of the land allocation or resource use, such an approach could be expected to
significantly reduce the pressure on federal forest managers to keep timber harvests high simply
to maintain steady payments to local government. However, if the severance tax component is
perceived as based on the amount of timber harvested the difficulties associated with the linkage
between federal timber harvest levels and federal revenue sharing may not be eliminated.
One alternative approach is a strict per acre payment, at a rate mutually agreed upon by
the federal agency and county government involved, and renegotiated on a five year basis. If
care is not exercised, this approach could have a tendency to be applied like an ad valorem tax.
Ad valorem taxes have been replaced with severance taxes in many states precisely because they
were seen as forcing forest landowners to harvest timber prematurely. Because timber growth
increased property value over time, the ad valorem tax creeps upward as well, with no current
income to the landowner to offset the increases tax. The response of private landowners has been
to harvest the timber as soon as possible to gain income to offset the taxes and to reduce property
value. If this sort of approach were taken on federal forest lands, whether intentionally or not,
it could bring a different sort of pressure to harvest, and could interfere with federal agencies'
attempts to adopt long-rotation management strategies consistent with providing more late-
successional forest habitat.
Legislative direction to adopt a land area basis for the calculation of payments-in-lieu-
of-taxes would have to provide that the value of standing timber not be a component in the
calculation, the value of these intact forest ecosystems accruing to the local government and
citizens in other ways, including watershed protection, fish and wildlife habitat, and opportunities
16 Draft Resource Management Plan for the Roseburg District (Portland, OR: Bureau of
Land Management, 1992)
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for recreation and tourism. One possibility that deserves further discussion and analysis is to
calculate federal payments on the equivalent of a land tax based on current use valuation.
Current use valuation has been used successfully by many state and local governments to reduce
the pressure on private landowners to shift land use toward development in order to escape a
growing tax burden. It has been useful in allowing owners to manage forest lands for
conservation purposes, including long-rotation management aimed at watershed protection and
habitat for wildlife needing late-successional forest ecosystems. Payments should be consistent
with current use valuation assessments used on private lands in the county.
Figure 1 - - Payments to Counties/Acre in Owl Region of OR & WA
1974-2002
90
80
70
60
50
$$/Acre
40
30
20
10
0
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001
Year
OR Forest Service
WA Forest Service
BLM O&C
1993-2002 calculated by 10-yr. avg. of previous decade
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Private Land Relationships
in Forest Ecosystem Management
To resolve the current controversies over endangered-species habitat protection, and to
avoid such acute ecological and socioeconomic difficulties in the future, we must look beyond
the traditional single-species approach to biodiversity conservation and begin focusing on the
sustainable management of forest ecosystems. In most regions of the United States, including
the Pacific Northwest, the delineation of ecologically important, landscape-scale ecosystems
encompasses both public and private lands, often interspersed with one another. An effective
forest ecosystem management strategy for the Pacific Northwest will recognize the important role
that private lands can play in complementing and supplementing ecosystem management on
adjacent public forest lands, but it must also recognize and accommodate the appropriate
economic and other goals and objectives on private lands.
Public forest lands constitute only a small portion of the total forest land base, and are
not sufficient in themselves to adequately protect biodiversity in forest ecosystems. Nationally,
federal and state lands constitute about 20 percent of the total forest land base. Of the remaining
80 percent that is privately held, 20 percent is industrial forest land and the remaining 60 percent
is held by non-industrial private owners, such as farmers. In Oregon and Washington, 43 percent
of the forest land is privately owned, 25 percent by corporations and 18 percent by non-industrial
private owners.¹⁷ Even in the Pacific Northwest, where ownerships tend to be larger and more
contiguous than in many regions of the country, the delineation of ecosystems along watershed
or other ecological boundaries will nearly always encompass an intermingled mixture of public
17 Wadell, K, D. Oswald, and D. Powell, Forest Statistics for the United States, 1987,
Resource Bulletin PNW-RB-168 (Portland, OR: USDA Forest Service, Pacific Northwest
Research Station, 1989).
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and private forest lands. This intermingling, combined with the fact that the vast majority of
forest land is in private ownership, means that private lands have a critical role to play in any
ecosystem-based strategy to protect biological diversity, water quality, and many other natural
values, whether just for the Pacific Northwest "owl region" or for the United States as a whole.
Private forest landowners have a variety of different goals, usually including economic
objectives. Often there are opportunities for private owners to better understand and protect
biodiversity values without materially interfering with their primary economic objectives for
owning and managing their forest land. Private timberlands have unique roles and
responsibilities, distinct from public forests. Appropriate economic objectives, such as profitably
growing and producing timber on a commercial basis, are pursued while fulfilling environmental
obligations described in both federal and state laws and regulations.
As the importance of protecting biological diversity in temperate U.S. forest ecosystems
has become evident, many companies have voluntarily sought the advice of ecologists and other
scientists to better understand and protect biodiversity values on private lands. During 1992,
more than 50 private corporations, including several of the largest forest products companies in
the United States, submitted biodiversity conservation proposals for endorsement by the
President's Commission on Environmental Quality (PCEQ).¹⁸ The proposals were reviewed by
a task force on biodiversity on private lands, measured against exacting criteria, and many of
them approved. As company officials came to better understand what biodiversity values existed
on their lands, many found that a great deal could be done to protect these values without
materially interfering with the primary economic objectives for owning and managing the land.
These efforts, supported entirely by the companies' own funds, are continuing today in many
parts of the country.
18 Report of the President's Commission on Environmental Quality (Washington, DC:
Council on Environmental Quality, 1993).
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But private forest landowners are also recognizing the importance of coordination across
ownership boundaries, with adjacent public as well as private landowners, to an integrated
ecosystem-based approach to forest management. It is in everyone's interest to move beyond
the current species-by-species approach to biodiversity conservation--resolving the spotted owl
controversy will mean little if the failure to protect habitat at the ecosystem level results in a
continuation of endangered species listings.
Representatives of forest products companies in the Pacific Northwest have stated their
commitment to ecosystem management on public forest lands.¹ 19 There are opportunities for
adjacent private lands to complement and supplement the achievement of ecosystem management
on public forest lands through new approaches that deal collectively with groups of species and
habitats. Private landowners have identified a number of actions they believe clarify the
appropriate role of private forest lands in managing the forest ecosystems of the Pacific
Northwest:
Protecting riparian areas and wetlands
Private forest landowners have the responsibility for managing riparian areas and wetlands
to provide for water quality, fish habitat, and associated wildlife values. Management
objectives may include: provision of shade and large organic debris for streams,
increasing the conifer component on riparian areas, assessing and monitoring the
effectiveness of current regulations, and cooperating with adjacent landowners to achieve
desired riparian conditions.
Providing habitat for early and mid-successional species
Private forest landowners will provide habitat for early successional species in conjunction
with their primary operation goal of sustainable timber production. In addition, through
silvicultural treatments designed to create and retain structures (large trees, snags, and
19 Statement of Jim Geisinger, President, Northwest Forestry Association to the President's
Forest Conference, Portland, Oregon, April 2, 1993.
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down logs) and diverse vegetative conditions, they will provide for many mid-
successional species (those that depend on the above structures) and some late-
successional species (those that require structural attributes or features of old forest
stands).
Assisting public land managers in meeting their responsibilities for late successional
ecosystems.
While the protection of late-successional ecosystems and species is primarily the
responsibility of public land managers, it is appropriate and desirable for private forest
landowners to cooperate, where practical, in meeting these objectives. For example,
private landowners might complement public obligations by providing owl dispersal
habitat, participating in land trades or sales critical to conservation programs, and working
within incentive and/or compensation programs that encourage protection of late-
successional species.
Maintaining site productivity.
Private forest landowners will maintain the basic productive capacity of their lands, with
particular reference to soil properties. This may be accomplished through such measures
as minimizing soil disturbance and compaction, improving road construction and
maintenance, and identifying and protecting fragile soils.20
However, private forest landowners currently face some substantial disincentives for
participating in a cooperative approach to forest ecosystem management.
Log shortages from reduced federal timber sales and price escalation have
encouraged premature harvest, particularly on small non-industrial holdings.
20
Smith, Gordon and Kohm, Katherine, The Role of Industrial Forestlands in the
Management of Western Washington's Forest Ecosystems. Discussion Paper. (Seattle, WA:
Olympic Natural Resources Center, University of Washington, 1993).
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Uncertainty in both federal and state forest regulation has discouraged holding
forest lands for long-term forestry purposes.
Forest improvements are often being deferred for fear that investment returns will
not be realized due to future harvest restrictions.
Productive forest lands are being converted to other land uses due to urban
encroachment which may limit its ultimate use.
Coordination across landscapes among corporate private forest landowners may
be viewed as antitrust violations.
The 1990 Farm Bill offers valuable incentives to non-industrial private
landowners for stewardship practices, but uneven application by the states under
individual state forest practices acts has penalized private owners and resulted in
assistance being denied.
Change is essential if we are to achieve harmonious protection and sustainable
management of our forest ecosystems. Continuing to focus on the stand level, single species and
jurisdiction in isolation can only intensify the crisis. It is time to look at broad ecosystems in
a collaborative approach with all forest landowners. By restoring and maintaining biological
diversity on a broad ecosystem basis, it is possible to achieve harmonious environmental
protection and sustainable use of our forest resources. Among the specific policy opportunities
for accomplishing this:
1.
Develop a multi-agency/party Regional Strategy for Biodiversity and Ecosystem
Management based on the bioregion (OR, WA and Northern CA), landscape/watershed,
and stand levels. Parties should be the three states and their applicable agencies and the
affected Federal agencies with private landowners participating as signatories or
associates.
2.
Develop non-regulatory approaches to facilitate the coordination across jurisdictional
boundaries in inventory, monitoring, planning and management decision making. These
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might include programs to encourage private voluntary efforts and the development of
market-based economic incentives. Consider changes in federal financial and tax
incentives. Coordinated Resource Management Plans (CRMP), such as Ecosystem
Management Agreements, could be developed jointly among landowners within an
ecosystem planning area to coordinate management strategies and action plans. Incentives
could be built in where landowner objectives are compromised.
3.
Adopt funding reform for Federal forestry investments. Include incentives on private land
for public values not reflected in the market place. Public forests should be funded on
a stewardship basis with product flows a result.
4.
Facilitate the development and application of collaborative decision making and
information gathering (remote sensing and GIS). This process is best articulated in the
recent report of the Blue Ribbon Panel on Forest Inventory and Analysis.²¹
5.
Avoid prescriptive legislation. Clearly articulate principles, goals, and objectives, then
create a policy and regulatory environment conducive to the development of innovative
local solutions to local situations.
6.
Respect the goals and objectives of individual landowners. Production on non-market
values by private landowners should be voluntary, encourage and facilitated by incentive
or compensation, not by regulation.
7.
Strengthen the capability and commitment of private, public and academic institutions to
the development of a more complete knowledge base to guide the task of understanding
and implementing ecosystem management.
21
Report of the Blue Ribbon Panel on Forest Inventory and Analysis (Washington, DC:
American Forest and Paper Association, 1992).
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8.
Build community and public support through education and participation in decision
making. Human communities, local economies and private property are important
considerations along with healthy and sustainable ecosystems.
Private forest lands can and must play an important role in any overall strategy to protect
and sustainably manage habitat for the northern spotted owl and other late-successional forest
species in the Pacific Northwest and throughout the country. There is a new understanding and
a new willingness among private forest landowners to play a complementary and supplemental
supporting role to the protection of biological diversity and other ecological values on adjacent
public lands. Currently there are a number of important disincentives for closer cooperation
among adjacent public and private forest landowners. It is important to identify these
disincentives and eliminate them to the extent possible while not undercutting the economic
purposes for which private organizations and individuals own and manage their forest land.
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Interactive Use of GIS Technology
to Prioritize Late-Successional Forests of
Greatest Ecological Value
Though all the remaining areas of old-growth forest in the Pacific Northwest are
important, not all are of equal importance to the survival of the northern spotted owl and
associated species characteristic of late-successional forest ecosystems. In the event that the
political compromise that is reached in this issue calls for some level of continued harvesting in
old-growth forests during an economic transition period, it is only prudent to be prepared with
the best available scientific information showing which of these areas is most critical, and which
areas harvesting should be directed towards if harvesting is to take place. Recent rapid advances
in remote-sensing and geographic information (GIS) technology have made possible the
development of better ecological information on the extent, location, and nature of PNW old-
growth forests than has ever been available before. The detailed ecological information, in
combination with the technological capability to analyze it and display it according to a variety
of different ecological criteria, afford a powerful tool for prioritizing the remaining old-growth
to ensure that the most valuable areas are known.
Background
What remains of the old-growth forest in the Pacific Northwest is but a fraction of what
it was only a century ago. As our understanding of the ecological functioning of these forests
improves, it is becoming increasingly clear how important they are to the viability of late-
successional forest species including--but not limited to-the northern spotted owl.
The most comprehensive and authoritative prioritization of Pacific Northwest old-growth
was conducted by the Scientific Panel on Late-Successional Forest Ecosystems (the "Gang of
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Page 35
Four"). With the help of a host of scientists and resource managers, the Scientific Panel took
the latest available maps of "potential old-growth" prepared from LandsatTM satellite photos and
hand-drew boundaries delineating the "most ecologically significant" (LS/OG1) from the
"ecologically significant" (LS/OG2), and the "remainder" (LS/OG3).
The mapping focused on larger aggregations of late-successional forest stands suitable
as management units for old-growth reserves rather than small individual patches. This means
that some areas of younger forest and cutover areas are included in areas mapped as late-
successional forest.22 It was assumed that young stands within the old-growth reserves would
eventually mature and fill in these openings. On the other hand, this approach left many small
sections of old-growth outside the boundaries of the proposed reserves and thus not
recommended for protection under the interim plan. Collectively, these small sections represent
thousands of acres of old-growth. It should also be noted that the mapping was done "to support
the development of interim proposals for reserves which would maintain options for a longer
term solution." It was thus a conservative estimate that may hold additional flexibility upon
closer analysis. Since the release of the Scientific Panel's report in October 1991, much
additional work has gone into the maps to assure better mapping precision and to check maps
against conditions on the ground.
GIS for landscape-scale ecosystem analysis and consensus-building
In the development of the Administration's proposal for protecting late-successional and
old-growth habitat for the spotted owl and other species, it will be important for ecologists,
resource managers, policymakers, and concerned citizens to be able to determine the effects of
imposing certain ecological or economic criteria, and to propose new alternatives as other
opportunities become evident.
22 Johnson, K.N., J.F. Franklin, J.W. Thomas, and J. Gordon, Alternatives for Management
of Late-Successional Forests of the Pacific Northwest, The Report of the Scientific Panel on
Late-Successional Forest Ecosystems, October 8, 1991, p. 2.
Forest Policy Center
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For example, the total acreage mapped as old-growth is only part of what needs to be
evaluated. It is critically important that the ecological condition of these stands be known as
well. Reserves proposed in land and resource management plans prepared by the Forest Service
and BLM were often in small or narrow blocks which, though they might serve other
environmental or aesthetic needs, did not effectively maintain old-growth ecological
characteristics and conditions. The relationship of federal forests to forests on adjacent state and
private lands will influence the effectiveness of the federal forest lands as late-successional
habitat. The age and structure of adjacent non-federal forests, now and in the foreseeable future,
will have a major effect on whether areas of federal forest should be classified as top priority for
reserves.
Recent advances in remote-sensing/GIS technology, and improved documentation of the
ecological data for Pacific Northwest forests, provide a tool with which key scientists and
decision makers can interact with one another in "real time" to test assumptions, explore new
alternatives, and perhaps arrive at a solution that was not evident before. The map of remaining
areas of old-growth, and their priorities relative to one another, can change drastically depending
on the ecological assumptions imposed, such as buffer width and minimum critical habitat size.
Environmental conditions along the edges of old-growth areas surrounded by cutover lands may
be significantly altered several hundred feet into the old-growth stand, meaning that unmodified
interior forest conditions exist only in a "core area" substantially smaller than the total area of
old-growth. In some cases, the total area of old-growth may meet the minimum critical habitat
size, but fail to do so when this "edge effect" is taken into account.
An example of the kind of interactive analysis that can be done in "real time" is the
testing of various assumptions concerning the minimum width of buffers that consider this edge
effect. Old-growth areas that are fairly contiguous and well connected assuming a 200-foot
buffer may show up as small islands incapable of supporting viable populations when it is
assumed that a 300-foot buffer is needed.
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In searching for an optimal compromise between what is ecologically possible and what
is economically, socially, and politically possible a great deal of give and take will occur. This
can be done with the key interests together and interacting with one another, with old-growth
maps being redrawn on a screen before them to show the effect of each new proposal or
assumption.
In order to utilize this new tool effectively, it will be necessary to get all of the
information in place and clearly define the major alternatives.
The players will need to specify the variables of interest, such as: What are the current
conditions and what impacts need to be measured over what time period? What
constraints should be placed on the landscape?
Alternatives must be specified, and the range of alternatives must be significant if the
analysis is to have any meaning?
Data layers must already be prepared showing key criteria for analysis of the alternatives:
ownership, administrative boundaries, slope, aspect, elevation, hydrology, historical
vegetation, and fragmentation, to name a few.
The next step is to work with decision makers to interactively build models which
simulate change (from present conditions) over time under different alternatives.
The final step is to connect changes in the landscape to changes in habitat and to changes
in the economy. This will provide the primary basis for analysis of the tradeoffs among
the alternatives.
This approach to analysis is critical to finding a solution that maximizes the probability
of long-term viable populations of late-successional forest species while minimizing the negative
Forest Policy Center
Page 38
impacts on timber-dependent communities and the regional economy of the Pacific Northwest.
The politics will still not be easy, but it is entirely plausible that the effective utilization of GIS
technology and the best available data on the ecological classification of Pacific Northwest forests
in a setting that allows open and direct interaction among the major stakeholders may uncover
alternatives that are as yet unknown and untried. And one of those alternatives may be
something very close to the optimal compromise that all are seeking. This should be an explicit
component of the Administration's plan, and sufficient funds and other resources should be made
available to ensure its success.
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Elimination of Log Export Subsidies:
Effects on Timber Supply and Employment
The export of unprocessed logs from the Pacific Northwest is currently subsidized by the
federal government through an income tax break of as much as 15 percent on the profits from
exports through approved Foreign Sales Corporations. Elimination of this subsidy could change
the economics of decisions by log sellers, resulting in a substantial portion of these log exports
being routed to the domestic market and helping to alleviate the current timber supply shortage
in western Oregon and western Washington. Current price trends suggest that this change in
federal tax policy could bring at least 250 million board feet of logs back into the PNW regional
economy, maintaining at least 1,000 jobs in the forest products and related industries.
Background
To encourage the export of American goods and services, the U.S. federal tax code
provides for a reduced income tax rate on profits from export sales to wholly-owned foreign
subsidiaries of American companies, known as Foreign Sales Corporations (FSCs).²³ In
December 1984, the FSC replaced the Domestic International Sales Corporation (DISC) as the
U.S. Government's primary tax incentive for U.S. exports. Congress passed the FSC legislation
in response to objections raised by some of our foreign trading partners that the DISC rules
created an illegal export subsidy under the General Agreement on Tariffs and Trade (GATT).
The tax incentive provided by the FSC legislation is in the form of a permanent exemption from
23 Taxation on Foreign Sales Corporations, 26 U.S.C. §§ 991-996 (1988).
Forest Policy Center
Page 40
federal income tax for up to 15 percent of the gross income from exports. 24 An exemption of
15 percent of gross income is equivalent to a reduction in the corporate income tax rate from 35
percent to slightly less than 29 percent.
The question of log exports has loomed large in the debate over how to mitigate the
impact of preserving old-growth forest habitat on timber-dependent communities. Until recently,
more than 3 billion board feet (BBF) of unprocessed logs were exported annually from Oregon
and Washington, mostly to Japan, China, and Korea. 25 The tightening of laws prohibiting the
export of logs from federal lands and new restrictions on the export of logs from state lands have
reduced this to approximately 2.2 BBF in 1992.26 To many, prohibiting the export of these
basic raw material resources has seemed like the natural solution to several problems. It would
route a major source of timber supply back to domestic mills, offsetting at least some portion of
the impact of old-growth set-asides. It would employ American workers in the processing of
valued-added goods for export, improving the balance of trade with our Asian trading
partners.²⁷
But a blanket prohibition of log exports from private lands also raises a host of complex
economic and legal questions, not the least of which relate to restraint of trade and the
attenuation of private property rights. Eliminating the FSC subsidy for the export of unprocessed
logs only (i.e., not affecting exports of lumber, paper, or other wood products) avoids many of
24 Goldstein, M. and Aronoff, A., Foreign Sales Corporations Tax Incentive for U.S.
Exporters (Washington, DC: U.S. Department of Commerce, 1988).
25 Warren, D., Production, Prices, Employment and Trade in Northwest Forest Industries
(Portland, OR: USDA Forest Service, Pacific Northwest Research Station, 1993).
26 A recent decision by the U.S. Ninth Circuit Court of Appeals found that the federal
restriction of log exports by state government is a violation of states' rights, so exports from state
lands can be expected to increase from current levels. See: Board of Natural Resources of the
State of Washington, et al. V. Brown, U.S. Court of Appeals, 9th Cir., May 4, 1993.
27 Letter from the Honorable Peter A. DeFazio to President George Bush, April 12, 1989.
Forest Policy Center
Page 41
these issues. It does not restrain private log sellers from selling to whoever offers the highest
price; it merely eliminates the additional financial incentive, currently estimated to cost taxpayers
approximately $100 million annually,28 that induces private owners to sell their logs to foreign
purchasers rather than to their neighbors.
Impact of log export subsidies on domestic timber purchasers
Under the current system, federal tax policy encourages a log seller to sell to the export
market even if domestic mills are willing to offer the same price as foreign buyers. A 5 percent
reduction in the corporate income tax rate for profits on exported logs, i.e., from 34 percent to
29 percent, means that a domestic purchaser would have to offer the seller a price more than
7.5 percent higher than the foreign buyer for the seller to be indifferent between the two.
In 1992, the average price for softwood sawlogs exported to China was approximately
$500 per thousand board feet (MBF).² With the FSC subsidy, the after-tax profit to the log
seller would be about $355/MBF. For the log seller to receive the same after-tax profit selling
to a domestic purchaser, the purchaser would have to offer at least $538/MBF. In other words,
a domestic purchaser would have to offer a price more than 7 percent higher than a foreign
purchaser in order to compete for the same log. In a highly competitive commodity market, this
puts the domestic purchasers at a distinct disadvantage, as a matter of federal policy.
For the highest quality logs, the export premium is so large that an elimination of the FSC
subsidy is unlikely to make a significant difference in log seller decisions on who to sell their
logs to. In 1992, the average value of softwood sawlogs exported to Japan was $748/MBF, about
$250 more per MBF than the average domestic price. These are not the same kinds of logs,
however. They tend to be of larger diameter, finer grain, with fewer knots, taper, sweep, or other
28
Letter from Joint Committee on Taxation, U.S. House of Representatives to the Honorable
Fortney Stark, February 6, 1992.
29
Warren, 1993. Op. cit.
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defects. For fine products such as furniture, moldings, and other millwork, domestic purchasers
pay the export price and get the same high-quality logs as purchased by Japan. With an export
premium of 50 percent or more, a 7 percent FSC subsidy has little influence over the log seller's
decision to sell to the export market, and the elimination of the subsidy is unlikely to change
those decisions.
However, about a quarter of the logs exported to the Far East are similar in quality to
what is purchased by domestic mills. For these logs there is little or no export premium and the
prices between the foreign and domestic markets are very competitive. In 1992, a total of 500.8
MMBF in softwood sawlogs was exported to Korea and China, with a total value of $244
million. The average price for the timber exported to China was $500/MBF, and to Korea
$477/MBF. During the same period, domestic prices for comparable grade (#2) Douglas-fir
sawlogs averaged $475/MBF in western Washington and $539/MBF in western Oregon.³⁰
Export prices have risen substantially during the past five years, but domestic prices have risen
even faster, substantially closing the gap between export and domestic prices for average-quality
softwood sawlogs.
Timber supply and employment effects of eliminating the log export subsidy
Elimination of the FSC subsidy would put domestic purchasers on an even footing with
foreign buyers, and could result in a substantial portion of these average-quality logs staying in
the domestic market. As described above, equivalent prices between the export and domestic
markets would still result in a financial decision by the log seller to sell to the foreign buyer.
A domestic purchaser would have to offer a significantly higher price in order for the log seller
to receive the same after-tax income. While there may be good reasons for the federal
government to not interfere with the free export of private goods, a federal policy that places
domestic purchasers at a distinct competitive disadvantage, and uses taxpayer dollars to put
needed raw materials further out of reach for Pacific Northwest mills is not in the public interest,
30 Log Lines, Arbor-Pacific Forestry Services, Mount Vernon, WA, 1993.
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Page 43
for the American people generally and for the people of the Pacific Northwest in particular.
Adding a substantial portion of this 500 MMBF back to the PNW regional timber supply
could sustain at least 1,000 jobs in the Pacific Northwest region. If by eliminating the FSC
subsidy 250 MMBF of domestic-quality logs-half of what is now exported to Korea and China
and less than one eighth of the total volume of softwood sawlogs currently being exported from
Oregon and Washington-can be retained for processing by Pacific Northwest mills, it could help
sustain more than 650 additional direct jobs in forest-products and related industries and an
additional 350 jobs in indirect/induced employment--jobs that would otherwise be lost as the
regional timber supply continues to decline.
Economists at the Forest Service and elsewhere have estimated that every million board
feet of timber harvested generates approximately 9.3 jobs/MMBF are generated directly in the
forest products industry.³ An additional 5.7 jobs/MMBF is generated through indirect and
induced employment.32 About 73 percent of this employment is generated by timber harvesting
and would occur whether the logs were subsequently exported or milled domestically. Thus, the
domestic milling of logs that otherwise would be exported generates approximately 4.0
jobs/MMBF in direct, indirect, and induced employment--about 1,000 total jobs from the
additional 250 MMBF/year. This might be offset to some extent by the tradeoff of export-
related employment and the indirect and induced jobs it represents.
31 USDA Forest Service, Economic Effects of Critical Habitat Areas on the National Forests,
An Update of the June 5, 1991 Analysis (Washington, DC: USDA Forest Service, October 1991).
32 Direct employment includes both primary and secondary wood processing. Primary wood
processing consists of logging, lumber production, plywood production, and the manufacture of
pulp and paper. Secondary wood processing is the manufacturing of finished goods (e.g.,
furniture, millwork). Indirect employment generally consists of activities servicing the timber
industry, such as transportation, marketing, and equipment sales/maintenance. Induced
employment involves providing goods and services purchased with wages, taxes, and other forms
of income derived from the forest products industry by individuals and government, ranging from
local government employees to employees of the local bank or grocer.
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Page 44
A bill currently under consideration in the House, H.R. 1542, proposes to eliminate the
FSC subsidy for log exports while retaining the original intent of the FSC for all other exports,
including lumber, panels, and other wood and paper products. This approach would do away
with a subsidy that is not needed and that works at cross purposes with efforts to mitigate the
economic impact of reduced timber supply on the economic health and welfare of communities
in western Oregon and western Washington.
One further consideration is for federal policymakers to take the estimated $100 million
annually that now underwrites the log export subsidy, along with some portion of the federal
income tax windfall associated with the recent steep rise in timber prices in the Pacific
Northwest, and invest it in economic transition assistance aimed at developing a sustainable
regional economy that is ecologically sound, economically viable, and socially responsible.
Forest Policy Center
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Appendix A:
Federal payments to counties in Washington and Oregon, 1974-1992, with projections to 2002
based on a ten-year rolling average (by total payments and per-acre equivalent).
6
Average per acre Oregon and Washington payments to
counties 1972-1992 with projections to 2002 based on
10-year rolling average (1991-2 adjusted for
spotted owl guarantees)
O&C
OR FS
WA FS
OR&WA PS
1972
14.67
1973
18.38
4.29
1974
22.51
4.02
1.69
1975
19.22
3.52
1.58
2.51
1976
34.55
6.34
2.04
4.10
1977
41.31
8.49
2.86
5.55
1978
8.00
9.96
3.09
6.38
1979
37.70
11.73
4.00
7.70
1980
38.02
9.89
3.32
6.46
1981
37.77
8.43
2.90
5.54
1982
15.31
4.63
1.88
3.20
1983
2.00
6.36
2.05
4.11
1984
18.61
7.99
2.50
5.12
1985
25.91
8.81
2.12
5.32
1986
23.81
10.73
2.70
6.54
1987
28.20
12.36
3.29
7.63
1988
27.00
13.68
4.43
8.85
1989
42.79
15.83
4.71
10.03
1990
79.68
13.86
3.66
8.54
1991
37.44
13.03
4.03
8.33
1992
35.31
12.04
3.41
7.54
1993
32.07
11.47
3.29
7.20
1994
35.08
11.98
3.41
7.51
1995
36.73
12.38
3.50
7.75
1996
37.81
12.74
3.64
7.99
1997
39.21
12.94
3.74
8.14
1998
40.31
12.99
3.78
8.19
1999
41.64
12.93
3.72
8.12
2000
41.53
12.64
3.62
7.93
2001
37.71
12.51
3.62
7.87
2002
37.74
12.46
3.57
7.82
Source: USDA Forest Service and USDI Bureau of Land
Management
Table A.1-Forest Service 25% payments to counties 1973-1992, with projections to 2002 based on 10-year rolling average
(1991-2 adjusted for spotted owl guarantees)
County/
Clackamas
Curry
Douglas
Jackson
Josephine
Lane
Linn
Multnomah
Tillamook
Yamhill
Acre
(510424)
(559739)
(904993)
(402380)
(296170)
(1334031)
(466332)
(76423)
(91223)
(25500)
Benton
Coos
Deschutes
Hood R.
Jefferson
Klamath
Lincoln
Marion
Polk
Wasco
Total
(16310)
(57939)
(980193)
(212637)
(164996)
(1722703)
(171651)
(204117)
(318)
(211350)
(8409429)
in million dollars
1973
0.16
2.56
0.24
1.81
1.02
5.59
1.07
1.55
0.20
0.97
2.45
9.68
1.65
3.23
1.30
0.36
0.00
0.89
1.05
0.25
36.04
1974
0.14
2.65
0.23
1.80
1.75
3.78
1.10
1.28
0.32
0.96
2.91
8.72
1.44
3.03
1.25
0.37
0.00
0.78
1.08
0.22
33.83
1975
0.11
1.97
0.20
1.60
1.03
4.82
0.82
1.28
0.19
0.86
2.00
7.91
1.14
2.76
1.08
0.28
0.00
0.62
0.80
0.17
29.64
1976
0.22
3.64
0.39
3.03
2.77
7.62
1.52
1.97
0.50
1.60
4.14
13.69
2.27
4.63
1.86
0.52
0.00
1.23
1.49
0.27
53.35
1977
0.31
3.72
0.48
3.45
3.69
9.31
1.55
2.97
0.65
1.85
5.67
20.75
3.22
7.28
2.61
0.53
0.01
1.75
1.52
0.07
71.36
1978
0.36
4.07
0.62
4.65
3.38
12.82
1.69
4.27
0.60
2.51
7.65
22.36
3.77
7.46
2.71
0.58
0.01
2.04
1.66
0.56
83.78
1979
0.39
5.39
0.78
6.28
4.41
14.98
2.24
5.27
0.78
3.37
9.86
24.09
4.05
7.97
3.03
0.76
0.01
2.20
2.20
0.61
98.66
1980
0.32
7.05
0.53
3.86
3.08
10.35
2.94
3.43
0.58
2.08
7.80
21.20
3.35
7.34
3.08
1.00
0.01
1.81
2.88
0.50
83.19
1981
0.36
5.59
0.48
3.05
4.64
9.70
2.33
4.38
0.82
1.71
6.58
13.06
3.73
6.26
2.57
0.79
0.01
2.02
2.28
0.56
70.91
1982
0.14
2.26
0.18
1.01
2.22
6.41
0.94
1.76
0.39
0.58
2.90
11.03
1.52
3.90
1.43
0.32
0.00
0.82
0.92
0.23
38.97
1983
0.19
3.67
0.27
1.71
4.53
6.65
1.53
3.91
0.78
1.02
7.57
9.56
2.30
4.59
1.82
0.52
0.00
1.08
1.50
0.30
53.50
1984
0.27
4.01
0.34
2.05
5.10
10.55
1.67
2.77
0.88
1.14
9.89
14.97
2.80
4.69
1.90
0.57
0.01
1.51
1.64
0.42
67.16
1985
0.28
3.46
0.46
3.35
5.02
9.53
1.44
4.18
0.86
1.85
10.22
18.15
2.89
6.24
2.28
0.49
0.01
1.57
1.41
0.43
74.10
1986
0.39
5.44
0.55
3.50
4.84
11.74
2.27
4.58
0.85
1.94
11.75
22.29
4.10
7.30
2.85
0.77
0.01
2.20
2.22
0.61
90.19
1987
0.35
5.38
0.58
4.13
4.44
18.99
2.24
5.47
0.78
2.29
13.04
25.34
3.70
8.52
3.20
0.77
0.01
1.99
2.20
0.55
103.97
1988
0.48
6.70
0.73
4.90
3.55
16.09
2.79
5.48
0.65
2.68
15.61
29.46
5.06
9.87
3.77
0.97
0.01
2.72
2.74
0.75
115.01
1989
0.53
6.27
0.89
6.42
3.20
22.82
2.60
6.40
0.59
3.48
16.83
34.56
5.56
11.49
4.18
0.91
0.01
2.99
2.58
0.83
133.14
1990
0.34
6.12
0.62
4.67
4.18
24.28
2.54
4.46
0.75
2.52
13.30
29.50
3.57
10.13
3.76
0.89
0.01
1.92
2.52
0.53
116.60
1991
0.41
5.94
0.67
4.80
3.28
18.89
2.47
4.97
0.60
2.60
13.31
28.19
4.26
9.41
3.53
0.89
0.01
2.29
2.45
0.63
109.60
1992
0.38
5.36
0.61
4.25
3.64
16.84
2.23
4.82
0.65
2.32
13.23
25.54
3.97
8.48
3.18
0.80
0.01
2.11
2.22
0.59
101.22
1993
0.36
5.23
0.57
3.98
4.18
15.64
2.18
4.70
0.74
2.18
12.48
23.76
3.82
8.07
3.05
0.76
0.01
2.04
2.15
0.56
96.45
1994
0.38
5.39
0.60
4.20
4.14
16.54
2.24
4.78
0.74
2.30
12.97
25.18
3.97
8.42
3.17
0.78
0.01
2.13
2.21
0.59
100.74
1995
0.39
5.53
0.63
4.42
4.05
17.13
2.30
4.98
0.72
2.42
13.27
26.20
4.09
8.79
3.30
0.80
0.01
2.20
2.27
0.61
104.10
1996
0.40
5.74
0.65
4.52
3.95
17.89
2.39
5.06
0.71
2.47
13.58
27.00
4.21
9.05
3.40
0.83
0.01
2.26
2.36
0.62
107.10
1997
0.40
5.77
0.66
4.63
3.86
18.51
2.40
5.11
0.69
2.53
13.76
27.47
4.22
9.22
3.45
0.84
0.01
2.26
2.37
0.63
108.79
1998
0.41
5.81
0.66
4.68
3.80
18.46
2.42
5.08
0.68
2.55
13.83
27.69
4.28
9.29
3.48
0.85
0.01
2.29
2.39
0.63
109.28
1999
0.40
5.72
0.66
4.66
3.83
18.70
2.38
5.04
0.69
2.54
13.66
27.51
4.20
9.24
3.45
0.83
0.01
2.25
2.35
0.62
108.70
2000
0.39
5.66
0.63
4.48
3.89
18.29
2.35
4.90
0.70
2.44
13.34
26.80
4.06
9.01
3.38
0.83
0.01
2.17
2.33
0.60
106.26
2001
0.39
5.61
0.63
4.46
3.86
17.69
2.34
4.94
0.69
2.44
13.34
26.53
4.11
8.90
3.34
0.82
0.01
2.20
2.31
0.61
105.23
2002
0.39
5.58
0.63
4.43
3.92
17.57
2.32
4.94
0.70
2.42
13.35
26.37
4.09
8.85
3.32
0.81
0.01
2.19
2.30
0.61
104.79
Table A.2-Forest Service 25% payments/acre to Oregon counties 1973-1992, with projections to 2002 based on 10-year rolling average
(1991-2 adjusted for spotted owl guarantees)
County/
Clackamas
Curry
Douglas
Jackson
Josephine
Lane
Linn
Multnomah
Tillamook
Yamhill
Acre
(510424)
(559739)
(904993)
(402380)
(296170)
(1334031)
(466332)
(76423)
(91223)
(25500)
Benton
Coos
Deschutes
Hood R.
Jefferson
Klamath
Lincoln
Marion
Polk
Wasco
Average
(16310)
(57939)
(980193)
(212637)
(164996)
(1722703)
(171651)
(204117)
(318)
(211350)
(8409429)
in dollars per acre
1973
9.69
5.02
4.13
3.23
1.04
6.17
5.02
3.86
1.19
3.29
1.42
7.25
9.63
6.92
6.37
4.75
9.69
9.80
4.96
9.67
4.29
1974
8.47
5.19
4.02
3.22
1.79
4.18
5.19
3.19
1.92
3.24
1.69
6.54
8.42
6.49
6.13
4.91
8.47
8.57
5.12
8.45
4.02
1975
6.68
3.86
3.47
2.86
1.05
5.33
3.86
3.18
1.16
2.90
1.16
5.93
6.64
5.92
5.30
3.65
6.69
6.76
3.81
6.67
3.52
1976
13.30
7.13
6.69
5.41
2.83
8.42
7.13
4.90
3.01
5.42
2.40
10.26
13.22
9.94
9.11
6.74
13.31
13.46
7.04
10.58
6.34
1977
18.91
7.28
8.29
6.16
3.76
10.29
7.27
7.38
3.93
6.25
3.29
15.55
18.74
15.61
12.79
6.87
18.95
19.17
7.17
2.70
8.49
1978
22.15
7.98
10.69
8.31
3.45
14.17
7.97
10.60
3.65
8.46
4.44
16.76
21.95
16.00
13.28
7.54
22.17
22.42
7.86
22.11
9.96
1979
23.80
10.55
13.42
11.22
4.50
16.55
10.54
13.10
4.73
11.36
5.73
18.06
23.61
17.09
14.86
9.97
23.82
24.11
10.40
23.77
11.73
1980
19.64
13.82
9.16
6.90
3.14
11.44
13.85
8.53
3.50
7.01
4.53
15.89
19.53
15.74
15.07
13.07
19.65
19.89
13.63
19.61
9.89
1981
21.82
10.95
8.37
5.44
4.74
10.72
10.95
10.89
4.97
5.76
3.82
9.79
21.73
13.43
12.57
10.36
21.83
22.10
10.80
21.78
8.43
1982
8.87
4.44
3.07
1.80
2.26
7.08
4.43
4.37
2.36
1.95
1.68
8.27
8.84
8.37
7.03
4.19
8.88
8.98
4.37
8.86
4.63
1983
11.71
7.20
4.59
3.05
4.62
7.35
7.21
9.73
4.73
3.43
4.39
7.16
13.43
9.84
8.93
6.81
11.72
11.86
7.10
11.70
6.36
1984
16.32
7.85
5.93
3.66
5.20
11.65
7.86
6.88
5.32
3.85
5.74
11.22
16.29
10.05
9.30
7.43
16.34
16.60
7.75
16.30
7.99
1985
16.90
6.77
7.91
5.98
5.12
10.53
6.77
10.39
5.22
6.25
5.93
13.60
16.86
13.39
11.15
6.41
16.91
17.18
6.67
16.87
8.81
1986
23.91
10.66
9.56
6.25
4.94
12.97
10.67
11.39
5.14
6.56
6.82
16.71
23.86
15.65
13.96
10.10
23.93
24.14
10.51
23.82
10.73
1987
21.58
10.53
10.03
7.37
4.53
20.99
10.55
13.59
4.75
7.73
7.57
19.00
21.55
18.28
15.67
10.10
21.60
21.79
10.39
21.50
12.36
1988
29.48
13.13
12.63
8.75
3.62
17.78
13.13
13.62
3.95
9.04
9.06
22.08
29.50
21.16
18.46
12.63
30.92
29.80
12.96
29.50
13.68
1989
32.40
12.29
15.38
11.47
3.26
25.21
12.25
15.90
3.59
11.74
9.77
25.91
32.42
24.64
20.49
11.89
32.43
32.75
12.23
32.43
15.83
1990
20.81
11.99
10.67
8.34
4.26
26.83
11.96
11.08
4.54
8.50
7.72
22.12
20.80
21.71
18.44
11.62
20.81
21.02
11.94
20.81
13.86
1991
24.84
11.64
11.61
8.57
3.34
20.87
11.62
12.35
3.64
8.79
7.73
21.13
24.84
20.18
17.30
11.59
24.84
25.12
11.61
24.84
13.03
1992
23.14
10.50
10.51
7.60
3.71
18.61
10.49
11.97
3.95
7.84
7.68
19.14
23.14
18.18
15.59
10.49
23.14
23.14
10.49
23.14
12.04
1993
22.11
10.26
9.88
7.10
4.26
17.28
10.25
11.69
4.48
7.37
7.24
17.81
22.27
17.31
14.93
9.91
22.26
22.34
10.17
22.09
11.47
1994
23.15
10.56
10.41
7.51
4.23
18.27
10.55
11.88
4.46
7.77
7.53
18.87
23.15
18.06
15.53
10.22
23.32
23.39
10.47
23.13
11.98
1995
23.83
10.83
10.86
7.89
4.13
18.93
10.82
12.39
4.37
8.16
7.70
19.64
23.84
18.86
16.15
10.49
24.02
24.07
10.74
23.81
12.38
1996
24.52
11.24
11.16
8.08
4.03
19.77
11.23
12.58
4.29
8.35
7.88
20.24
24.54
19.40
16.65
10.90
24.73
24.75
11.15
24.51
12.74
1997
24.59
11.30
11.31
8.27
3.94
20.45
11.28
12.70
4.20
8.53
7.99
20.59
24.60
19.78
16.92
10.98
24.81
24.82
11.22
24.58
12.94
1998
24.89
11.37
11.44
8.36
3.88
20.40
11.36
12.62
4.15
8.61
8.03
20.75
24.91
19.93
17.05
11.07
25.13
25.12
11.30
24.88
12.99
1999
24.43
11.20
11.32
8.32
3.90
20.66
11.18
12.52
4.17
8.57
7.93
20.62
24.45
19.80
16.90
10.91
24.55
24.65
11.13
24.42
12.93
2000
23.63
11.09
10.92
8.00
3.97
20.21
11.07
12.18
4.22
8.25
7.74
20.09
23.65
19.32
16.55
10.82
23.76
23.84
11.02
23.62
12.64
2001
23.91
11.00
10.94
7.97
3.94
19.55
10.99
12.29
4.19
8.22
7.74
19.89
23.94
19.08
16.36
10.74
24.05
24.12
10.93
23.90
12.51
2002
23.82
10.93
10.88
7.91
4.00
19.41
10.92
12.28
4.25
8.17
7.75
19.76
23.85
18.97
16.26
10.65
23.98
24.02
10.86
23.81
12.46
Table A.3-Porest Service 25% payments to Washington counties 1974-1992. with projections to 2002 based on 10-year rolling average
(1991-2 adjusted for spotted owl guarantees)
County/
Clallam
Cowlitz
Jefferson
Kittitas
Mason
Pierce
Skamania
Thurston
Yakima
Acre
(519728
(32610)
(700461)
(413164)
(164866)
(124579)
(846995)
(622)
(504095)
Chelan
Clark
Grays H.
King
Lewis
Okanogan
Skagit
Snohomish
Whatcom
Total
(1441113)
(1180)
(149584)
(349467)
(446116)
(1499866)
(518633)
(631606)
(836277)
(918096
in million dollars
1974
0.82
0.97
0.01
0.12
0.03
1.32
0.70
0.32
2.27
0.31
0.78
0.27
0.38
4.63
0.70
0.00
0.66
1.18
15.49
1975
0.37
1.16
0.01
0.12
0.27
0.90
0.81
0.23
2.27
0.28
0.32
0.32
0.32
4.56
0.71
0.00
0.56
1.34
14.54
1976
0.80
1.19
0.01
0.12
0.37
1.61
0.87
0.35
2.34
0.12
0.73
0.34
0.67
4.70
1.07
0.00
2.03
1.43
18.76
1977
1.27
1.88
0.01
0.16
0.58
2.54
1.31
0.54
3.12
0.60
1.53
0.51
0.86
6.26
1.46
0.00
1.50
2.12
26.24
1978
1.36
1.88
0.01
0.20
0.58
2.53
1.07
0.52
3.75
0.59
1.26
0.41
1.12
7.74
1.58
0.00
1.97
1.84
28.41
1979
1.50
2.94
0.02
0.25
0.91
3.97
1.43
0.61
4.76
0.93
1.41
0.56
1.28
9.79
1.87
0.00
2.07
2.45
36.75
1980
0.93
2.95
0.01
0.16
0.91
3.99
1.44
0.47
3.20
0.94
1.56
0.56
1.14
6.36
1.75
0.00
1.84
2.30
30.50
1981
1.42
2.16
0.01
0.15
0.67
2.92
1.42
0.59
2.94
0.69
1.60
0.55
1.05
5.79
0.72
0.00
1.70
2.25
26.62
1982
0.32
1.38
0.01
0.10
0.43
1.87
0.85
0.22
1.91
0.44
0.40
0.33
0.95
3.82
1.30
0.00
1.57
1.36
17.25
1983
0.90
1.12
0.01
0.12
0.34
1.51
0.99
0.39
2.30
0.35
1.29
0.38
0.69
4.62
1.12
0.00
1.12
1.59
18.85
1984
1.34
1.58
0.01
0.14
0.49
2.13
1.07
0.51
2.74
0.50
0.62
0.41
1.03
5.55
1.46
0.00
1.67
1.75
22.99
1985
1.31
1.12
0.01
0.13
0.35
1.51
0.83
0.46
2.48
0.35
0.82
0.32
0.82
5.11
1.15
0.00
1.33
1.39
19.48
1986
2.37
1.53
0.01
0.20
0.47
2.07
1.25
0.79
2.89
0.49
1.09
0.45
0.77
5.93
1.31
0.00
1.24
1.95
24.78
1987
1.90
1.59
0.01
0.30
0.49
2.14
1.64
0.74
3.87
0.50
1.44
0.59
1.04
7.91
1.75
0.00
1.68
2.57
30.17
1988
2.29
2.35
0.02
0.44
0.72
3.17
1.76
0.86
5.46
0.74
2.26
0.63
1.35
11.42
2.09
0.00
2.18
2.89
40.64
1989
2.61
2.57
0.01
0.42
0.79
3.46
2.39
1.04
5.27
0.81
2.92
0.86
1.27
10.73
2.33
0.00
2.05
3.70
43.25
1990
2.28
1.82
0.01
0.33
0.53
2.46
2.00
0.89
4.24
0.58
1.34
0.72
1.05
8.61
1.93
0.00
1.70
3.06
33.56
1991
2.16
2.03
0.01
0.38
0.58
2.74
2.17
0.89
4.82
0.64
1.95
0.78
1.15
9.85
2.08
0.00
1.85
2.91
37.00
1992
2.06
1.78
0.01
0.31
0.51
2.40
1.74
0.79
3.90
0.57
1.63
0.61
0.99
8.04
1.72
0.00
1.59
2.67
31.34
1993
1.92
1.75
0.01
0.28
0.53
2.36
1.58
0.74
3.80
0.55
1.53
0.58
1.02
7.78
1.69
0.00
1.64
2.45
30.21
1994
2.02
1.81
0.01
0.29
0.55
2.44
1.64
0.77
3.95
0.57
1.56
0.59
1.05
8.09
1.75
0.00
1.69
2.53
31.34
1995
2.09
1.83
0.01
0.31
0.55
2.47
1.70
0.80
4.07
0.58
1.65
0.61
1.05
8.35
1.78
0.00
1.70
2.61
32.18
1996
2.17
1.91
0.01
0.33
0.57
2.57
1.79
0.83
4.23
0.60
1.74
0.64
1.07
8.67
1.84
0.00
1.73
2.73
33.45
1997
2.15
1.94
0.01
0.34
0.58
2.62
1.84
0.83
4.36
0.62
1.80
0.66
1.10
8.95
1.90
0.00
1.78
2.81
34.31
1998
2.18
1.98
0.01
0.34
0.59
2.67
1.86
0.84
4.41
0.63
1.84
0.67
1.11
9.05
1.91
0.00
1.79
2.84
34.73
1999
2.16
1.94
0.01
0.33
0.58
2.62
1.87
0.84
4.30
0.62
1.80
0.67
1.09
8.81
1.89
0.00
1.75
2.83
34.14
2000
2.12
1.88
0.01
0.32
0.56
2.54
1.82
0.82
4.21
0.60
1.68
0.65
1.07
8.62
1.85
0.00
1.72
2.75
33.22
2001
2.10
1.89
0.01
0.32
0.56
2.54
1.80
0.81
4.20
0.60
1.72
0.65
1.07
8.62
1.84
0.00
1.73
2.71
33.19
2002
2.10
1.87
0.01
0.32
0.56
2.52
1.77
0.81
4.14
0.59
1.69
0.63
1.06
8.50
1.82
0.00
1.71
2.70
32.81
Table A.4-Forest Service 25% payments/acre to Washington counties 1974-1992, with projections to 2002 based on 10-year rolling average
(1991-2 adjusted for spotted owl guarantees)
County/
Clallam
Cowlitz
Jefferson
Kittitas
Mason
Pierce
Skamania
Thurston
Yakima
Acre
(519728
(32610)
(700461)
(413164)
(164866)
(124579)
(846995)
(622)
(504095)
Chelan
Clark
Grays H.
King
Lewis
Okanogan
Skagit
Snohomish
Whatcom
Average
(1441113)
(1180)
(149584)
(349467)
(446116)
(1499866)
(518633)
(631606)
(836277)
(918096
in dollars per acre
1974
0.57
1.87
6.92
3.69
0.21
1.88
1.99
0.78
5.09
1.88
0.52
2.17
0.73
5.47
1.12
2.08
0.79
2.34
1.69
1975
0.26
2.23
6.82
3.63
1.78
1.29
2.33
0.55
5.08
1.69
0.21
2.54
0.62
5.39
1.13
2.42
0.67
2.67
1.58
1976
0.56
2.29
7.02
3.74
2.46
2.29
2.50
0.84
5.25
0.75
0.49
2.72
1.30
5.55
1.69
2.61
2.43
2.85
2.04
1977
0.88
3.61
9.33
4.89
3.87
3.62
3.75
1.29
7.00
3.62
1.02
4.08
1.65
7.39
2.32
3.91
1.80
4.20
2.86
1978
0.95
3.61
11.55
6.05
3.86
3.61
3.05
1.25
8.40
3.60
0.84
3.32
2.17
9.14
2.51
3.19
2.35
3.66
3.09
1979
1.04
5.66
14.60
7.66
6.06
5.67
4.10
1.48
10.67
5.66
0.94
4.47
2.47
11.56
2.96
4.31
2.47
4.86
4.00
1980
0.65
5.68
9.48
4.90
6.09
5.69
4.11
1.14
7.16
5.68
1.04
4.48
2.20
7.50
2.76
4.23
2.20
4.56
3.32
1981
0.99
4.16
8.64
4.46
4.45
4.16
4.06
1.43
6.59
4.16
1.06
4.42
2.03
6.84
1.14
4.24
2.03
4.46
2.90
1982
0.22
2.66
4.57
2.97
2.86
2.67
2.44
0.53
4.28
2.66
0.27
2.65
1.83
4.51
2.06
2.55
1.88
2.70
1.88
1983
0.63
2.15
5.53
3.60
2.30
2.15
2.83
0.94
5.17
2.15
0.86
3.08
1.33
5.46
1.77
2.94
1.34
3.16
2.05
1984
0.93
3.04
6.63
4.31
3.25
3.04
3.06
1.24
6.14
3.04
0.41
3.33
1.99
6.55
2.32
3.19
2.00
3.46
2.50
1985
0.91
2.15
6.11
3.97
2.31
2.16
2.36
1.12
5.56
2.15
0.54
2.58
1.58
6.03
1.82
2.47
1.59
2.75
2.12
1986
1.64
2.95
6.90
6.16
3.16
2.95
3.57
1.92
6.47
2.95
0.72
3.60
1.48
7.00
2.07
3.54
1.48
3.86
2.70
1987
1.32
3.05
9.20
9.35
3.27
3.05
4.70
1.79
8.68
3.05
0.96
4.74
2.01
9.34
2.77
4.72
2.01
5.09
3.29
1988
1.59
4.52
13.36
13.62
4.84
4.52
5.04
2.08
12.23
4.52
1.51
5.09
2.61
13.49
3.30
5.01
2.61
5.72
4.43
1989
1.81
4.94
12.54
12.78
5.29
4.94
6.85
2.51
11.82
4.94
1.94
6.91
2.45
12.67
3.69
6.88
2.45
7.35
4.71
1990
1.58
3.51
10.24
10.24
3.51
3.51
5.72
2.15
9.50
3.51
0.89
5.74
2.03
10.17
3.06
5.65
2.03
6.08
3.66
1991
1.50
3.91
11.69
11.69
3.91
3.91
6.22
2.14
10.80
3.91
1.30
6.24
2.21
11.63
3.29
6.14
2.22
5.78
4.03
1992
1.43
3.43
9.49
9.49
3.43
3.43
4.97
1.91
8.75
3.43
1.08
4.89
1.91
9.49
2.72
4.94
1.91
5.31
3.41
1993
1.33
3.36
9.17
8.52
3.53
3.37
4.53
1.78
8.51
3.36
1.02
4.62
1.96
9.18
2.68
4.55
1.96
4.86
3.29
1994
1.40
3.49
9.53
9.01
3.65
3.49
4.70
1.86
8.85
3.49
1.04
4.77
2.02
9.55
2.77
4.71
2.03
5.03
3.41
1995
1.45
3.53
9.82
9.48
3.69
3.53
4.87
1.93
9.12
3.53
1.10
4.92
2.03
9.86
2.82
4.86
2.03
5.18
3.50
1996
1.51
3.67
10.20
10.03
3.83
3.67
5.12
2.01
9.47
3.67
1.16
5.15
2.07
10.24
2.92
5.10
2.07
5.43
3.64
1997
1.49
3.74
10.52
10.42
3.89
3.74
5.27
2.02
9.77
3.74
1.20
5.31
2.13
10.56
3.00
5.26
2.13
5.58
3.74
1998
1.51
3.81
10.66
10.53
3.96
3.81
5.33
2.04
9.88
3.81
1.23
5.36
2.14
10.68
3.02
5.31
2.14
5.63
3.78
1999
1.50
3.74
10.39
10.22
3.87
3.74
5.36
2.04
9.65
3.74
1.20
5.39
2.10
10.40
3.00
5.34
2.10
5.62
3.72
2000
1.47
3.62
10.17
9.96
3.73
3.62
5.21
1.99
9.43
3.62
1.12
5.24
2.06
10.18
2.93
5.19
2.06
5.45
3.62
2001
1.46
3.63
10.16
9.94
3.75
3.63
5.16
1.97
9.42
3.63
1.15
5.19
2.06
10.18
2.92
5.14
2.06
5.39
3.62
2002
1.46
3.60
10.01
9.76
3.73
3.60
5.05
1.95
9.29
3.60
1.13
5.08
2.05
10.03
2.88
5.04
2.05
5.35
3.57
FOREST POLICY CENTER
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