SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOC
59–858 l
1999
H.R. 2389, COUNTY SCHOOLS REVITALIZATION ACT OF 1999 AND H.R. 1185, TIMBER-DEPENDENT COUNTIES STABILIZATION ACT
HEARING
before the
SUBCOMMITTEE ON FORESTS AND FOREST HEALTH
of the
COMMITTEE ON RESOURCES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
JULY 13, 1999, WASHINGTON, DC
Serial No. 106–45
Page 2 PREV PAGE TOP OF DOC
Printed for the use of the Committee on Resources
Available via the World Wide Web: http://www.access.gpo.gov/congress/house
or
Committee address: http://www.house.gov/resources
COMMITTEE ON RESOURCES
DON YOUNG, Alaska, Chairman
W.J. (BILLY) TAUZIN, Louisiana
JAMES V. HANSEN, Utah
JIM SAXTON, New Jersey
ELTON GALLEGLY, California
JOHN J. DUNCAN, Jr., Tennessee
JOEL HEFLEY, Colorado
JOHN T. DOOLITTLE, California
WAYNE T. GILCHREST, Maryland
KEN CALVERT, California
RICHARD W. POMBO, California
BARBARA CUBIN, Wyoming
HELEN CHENOWETH-HAGE, Idaho
GEORGE P. RADANOVICH, California
WALTER B. JONES, Jr., North Carolina
Page 3 PREV PAGE TOP OF DOC
WILLIAM M. (MAC) THORNBERRY, Texas
CHRIS CANNON, Utah
KEVIN BRADY, Texas
JOHN PETERSON, Pennsylvania
RICK HILL, Montana
BOB SCHAFFER, Colorado
JIM GIBBONS, Nevada
MARK E. SOUDER, Indiana
GREG WALDEN, Oregon
DON SHERWOOD, Pennsylvania
ROBIN HAYES, North Carolina
MIKE SIMPSON, Idaho
THOMAS G. TANCREDO, Colorado
GEORGE MILLER, California
NICK J. RAHALL II, West Virginia
BRUCE F. VENTO, Minnesota
DALE E. KILDEE, Michigan
PETER A. DeFAZIO, Oregon
ENI F.H. FALEOMAVAEGA, American Samoa
NEIL ABERCROMBIE, Hawaii
SOLOMON P. ORTIZ, Texas
OWEN B. PICKETT, Virginia
FRANK PALLONE, Jr., New Jersey
CALVIN M. DOOLEY, California
Page 4 PREV PAGE TOP OF DOC
CARLOS A. ROMERO-BARCELÓ, Puerto Rico
ROBERT A. UNDERWOOD, Guam
PATRICK J. KENNEDY, Rhode Island
ADAM SMITH, Washington
WILLIAM D. DELAHUNT, Massachusetts
CHRIS JOHN, Louisiana
DONNA CHRISTIAN-CHRISTENSEN, Virgin Islands
RON KIND, Wisconsin
JAY INSLEE, Washington
GRACE F. NAPOLITANO, California
TOM UDALL, New Mexico
MARK UDALL, Colorado
JOSEPH CROWLEY, New York
RUSH D. HOLT, New Jersey
LLOYD A. JONES, Chief of Staff
ELIZABETH MEGGINSON, Chief Counsel
CHRISTINE KENNEDY, Chief Clerk/Administrator
JOHN LAWRENCE, Democratic Staff Director
Subcommittee on Forests and Forest Health
HELEN CHENOWETH-HAGE, Idaho, Chairman
JOHN J. DUNCAN, Jr., Tennessee
JOHN T. DOOLITTLE, California
Page 5 PREV PAGE TOP OF DOC
WAYNE T. GILCHREST, Maryland
JOHN PETERSON, Pennsylvania
RICK HILL, Montana
BOB SCHAFFER, Colorado
DON SHERWOOD, Pennsylvania
ROBIN HAYES, North Carolina
ADAM SMITH, Washington
DALE E. KILDEE, Michigan
OWEN B. PICKETT, Virginia
RON KIND, Wisconsin
GRACE F. NAPOLITANO, California
TOM UDALL, New Mexico
MARK UDALL, Colorado
JOSEPH CROWLEY, New York
DOUG CRANDALL, Staff Director
ANNE HEISSENBUTTEL, Legislative Staff
JEFF PETRICH, Minority Chief Counsel
C O N T E N T S
Hearing held July 13, 1999
Statements of Members:
Page 6 PREV PAGE TOP OF DOC
Boyd, Hon. Allen, a Representative in Congress from the State of Florida
Prepared statement of
Hill, Hon. Rick, a Representative in Congress from the State of Montana
Prepared statement of
Statements of witnesses:
Dennison, William N., Supervisor, District 3, Plumas County, California
Prepared statement of
Dombeck, Mike, Chief of the U.S. Forest Service
Prepared statement of
Douglas, Robert E., Tehema County Superintendent of Schools, Red Bluff, California
Prepared statement of
Green, Bobby, Chairman, Lane County Board of Commissioners, Eugene, Oregon
Prepared statement of
Spain, Glen, Pacific Coast Federation of Fisherman's Associations
Prepared statement of
Additional material supplied:
Text of H.R. 1185
Text of H.R. 2389
HEARING ON H.R. 2389, COUNTY SCHOOLS REVITALIZATION ACT OF 1999 AND H.R. 1185, TIMBER-DEPENDENT COUNTIES STABILIZATION ACT
TUESDAY, JULY 13, 1999
Page 7 PREV PAGE TOP OF DOC
House of Representatives,
Subcommittee on Forests,
and Forest Health,
Committee on Resources,
Washington, DC.
The Subcommittee met, pursuant to call, at 2 p.m. in Room 1334, Longworth House Office Building, Hon. Rick Hill presiding.
Mr. HILL. [presiding] The Subcommittee on Forest and Forest Health will come to order. The Subcommittee is meeting today to hear testimony on H.R. 1185, the Timber-Dependent Counties Stabilization Act, and H.R. 2389, the County Schools Revitalization Act of 1999.
[The information follows:]
Mr. HILL. Under rule 4G of the Committee rules, any oral opening statements at the hearing are limited to the chairman or Ranking Minority Member which will allow us to hear from the witnesses sooner and allow Members to keep their schedules. Therefore, if any other Members have statements, they can be included in the hearing record under unanimous consent.
STATEMENT OF HON. RICK HILL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MONTANA
Since 1908, counties and school systems adjacent to the national forests have received 25 percent of the gross receipts from the management of these lands. These payments were established to compensate communities for the lack of taxes that would have otherwise been generated had the lands been in private ownership.
Page 8 PREV PAGE TOP OF DOC
A similar program compensates counties by 50 percent of the gross receipts from the BLM managed O&C lands. The bulk of the funds for these two programs came from the sale of Federal timber. As the volume of timber sales began to fall on national forest and BLM lands in the late 1980s, so did the amount of these payments, leaving many rural communities in severe economic straits. What is at stake now is the education and welfare of our children.
One approach, offered by Representative DeFazio, H.R. 1185, and comparable to the administration proposal would lead to the decoupling of payments from receipts. The other approach, H.R. 2389, maintains a linkage between payments and economic activities, recognizing the importance of jobs to local communities.
This second approach was developed by a remarkable grassroots coalition of over 500 organizations in 32 States, called the National Forest Counties and Schools Coalition. Based on a set of principles established by this group, our colleagues, Mr. Allen Boyd of Florida, and Nathan Deal of Georgia, developed legislation that would create a safety net of payments to counties in the short term and at the same time create a committee to develop long-term solutions.
[The prepared statement of Mr. Hill follows:]
STATEMENT OF HON. RICK HILL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MONTANA
Today's hearing will examine two different legislative approaches to resolving the issue of payments to county schools.
Since 1908, counties and school systems adjacent to national forests have received 25 percent of the gross receipts from the management of these lands. These payments were established to compensate communities for the lack of taxes that would have otherwise been generated had the lands been in private ownership. A similar program compensates counties by 50 percent of the gross receipts from BLM managed O&C lands. The bulk of the funds for these two programs came from the sale of Federal timber. As the volume of timber sales began to fall on national forest and BLM lands in the late 1980's, so did the amount of these payments, leaving many rural communities in severe economic straits. What's at stake now is the education and welfare of our children.
Page 9 PREV PAGE TOP OF DOC
One approach, offered by Rep. DeFazio, H.R. 1185, and comparable to the Administration proposal would lead to the ''decoupling'' of payments from receipts. The other approach, H.R. 2389, maintains a linkage between payments and economic activities, recognizing the importance of jobs to local communities. This second approach was developed by a remarkable grassroots coalition of over 500 organizations in 32 states, called The National Forest Counties and Schools Coalition. Based on a set of principles established by this group, our colleagues, Mr. Allen Boyd of Florida and Nathan Deal of Georgia, developed legislation that would create a safety net of payments to counties in the short-term and at the same time create a committee to develop long-term solutions.
To present his bipartisan bill I would like to first introduce Allen Boyd for his testimony on H.R. 2389. I would also like to thank both he and Mr. Deal for all their hard work with the National Forest Counties and Schools Coalition in formulating this consensus legislation.
Mr. HILL. To present his bipartisan bill, I would like to first introduce Allen Boyd for his testimony on H.R. 2389. I would also like to thank both he and Mr. Deal for all their hard work with the National Forest Counties and Schools Coalition in formulating this consensus legislation.
Mr. HILL. The Chairman would now recognize the Ranking Minority Member for any statement he might have.
Mr. SMITH. I will save my comments for questions to witnesses.
Mr. HILL. We will introduce Mr. Allen Boyd from Florida. You are recognized.
STATEMENT OF HON. ALLEN BOYD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA
Page 10 PREV PAGE TOP OF DOC
Mr. BOYD. Thank you very much, Mr. Chairman and Congressman Smith, Ranking Member. First of all I want to thank you, Mr. Chairman, and the other members of the Subcommittee for allowing me the privilege of testifying before you about H.R. 2389, the County Schools Funding Revitalization Act of 1999.
You have a written statement before you, and I want to briefly summarize that in a short oral statement and then will be glad to take your questions. The issue of forest revenue payments by the Federal Government to local affected communities is very important to a large portion of the Second Congressional District of Florida. The Second Congressional District is a very rural district which encompasses 19 counties and two national forests, the Apalachicola and the Osceola in the Florida panhandle. In fact, I have been working on this issue since the time I served in the Florida state legislature. I hope that this hearing will serve as a springboard for Congress to finally address and solve these issues that adversely effect so many communities across this Nation.
As you stated, Mr. Chairman, in 1908 the Federal Government entered into a compact with rural forest communities in which the government was the dominant landowner. Under this compact, counties received 25 percent of the revenues generated from Federal forest lands to compensate them for a diminished tax base. By law, these revenues financed public schools and local road infrastructure. However, in recent years, the principal source of these revenues, Federal timber sales, has been sharply curtailed due to changes in Federal forest management policy, and those revenues, shared with States and counties have declined significantly.
If you would look at Exhibit 1 which is before you here, perhaps the most significant thing about these changes in policy is not the decline in harvest but rather the fact that in 1998, the net annual growth of timber in the Apalachicola National Forest was about 800 percent greater than the volume harvested. And the sawtimber growth is approximately 50 times greater than the volume harvested. I will say again, the annual growth in the Apalachicola National Forest total volume is 8 times that which was harvested and the sawtimber was 50 times that which was harvested.
Page 11 PREV PAGE TOP OF DOC
As we know, payments to many counties have dropped to less than 10 percent of their historic levels under this compact, and this impact on rural communities and schools has been staggering.
If you look at the next exhibit, Exhibit 2, the returns to the four counties of the Apalachicola National Forest dropped 89 percent. This decline in sheer revenues has severely impacted or crippled educational funding, the quality of education provided, and the services offered in those affected counties.
Since my time is limited, I will not detail all of the various painful cuts incurred by our counties and schools, but I hope that you will read the written testimony which is more specific in this area.
I do want to outline two very specific areas that have happened in Liberty County, Florida, which is the county that contains more of the Apalachicola National Forest than any other.
First, let us talk about a county obligation and that is the county emergency response organization. Liberty County in Florida is the only county that does not have an advanced life support system for its county emergency response organization. That is a basic when you talk about rural counties where hospitals in many cases are a hundred miles away. We don't have an advanced life support system in that county for its citizens.
The second area and probably the most far reaching and devastating impact is the adverse effect on the future of our children. When I was in the legislature in the late eighties, we established in the State of Florida a prekindergarten program which we considered as a very critical part of dealing with some of the problems that we had in our schools. That has been an enormous success in the State of Florida.
That program actually was a mandatory program in Florida. In the last couple of years as we have done what we call accountability decentralization of our educational system, we have allowed the local governments to make decisions about those kinds of programs. In Liberty County, which was the first county in the State to enroll all of its eligible pre-K students, the school system in the last 3 years has totally eliminated that program. It is really sad. An education system crippled by such severe funding cuts cannot train the young people in the skills needed to join tomorrow's society as contributing, productive, and tax-paying citizens.
Page 12 PREV PAGE TOP OF DOC
It is very clear to me that the compact of 1908 is broken and needs to be fixed immediately. That is why I, along with my colleague, Nathan Deal, have introduced the County Schools Funding Revitalization Act of 1999. This legislation is based on principles that were part of a compromise agreement reached by the National Forest Counties and Schools Coalition. It was not developed by a Washington knows best top-down approach, but rather through a bottom-up approach that has finally reached a consensus. This coalition includes over 500 groups from approximately 32 States, including school superintendents, county commissioners, educators, the National Education Association, and the U.S. Chamber of Commerce.
This bill contains two provisions. First, it would restore stability to the 25 percent payment of the compact by ensuring a predictable payment level to the Federal forest communities for an interim 5-year period. This payment program would be based on the average of the three highest payments received by a State in fiscal years from 1985 until the time this bill is enacted. This is obviously a necessary step to arrest the current destructive downward spiral.
Secondly, the bill requires the Federal Government to collaborate with the local communities and school representatives as part of the Forest Counties Payment Committee to develop a permanent solution that will fix the 1908 compact for the long term.
In closing, Mr. Chairman, the Federal Government must fulfill the promise made to these communities in 1908. Together we can fix the compact and restore long-term stability to our rural schools and government and the families that depend on them.
Mr. Chairman, I thank you for the opportunity to come before you and am prepared to answer any questions you might have.
[The prepared statement of Mr. Boyd follows:]
STATEMENT OF HON. ALLEN BOYD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA
Madam Chairman, first of all, I want to thank you and the other members of this Subcommittee for allowing me the privilege of testifying before you about H.R. 2389, the County Schools Funding Revitalization Act of 1999. The issue of forest revenue payments by the Federal Government to local affected communities is very important to a large portion of my Congressional district, which is a very rural district that encompasses 19 counties in the Florida panhandle. In fact, I have been working on this issue since the time I was serving in the Florida State Legislature. I hope this hearing is the springboard to having Congress finally address and solve this issue that affects communities in so many adverse ways.
Page 13 PREV PAGE TOP OF DOC
The Second Congressional District, which I have the honor of representing in the House, is located in the panhandle of the state, running from Panama City in the west to the middle of the Osceola National Forest in the east. It has the entire Apalachicola National Forest within its borders and also encompasses part of the Osceola National Forest. The district has over 760,000 acres of national forestland.
Background
In 1908, the Federal Government recognized that counties with Federal lands were at an economic disadvantage since the Federal Government was the dominant landowner in many of these communities and therefore these counties were powerless to tax these lands. Recognizing this, Congress entered into a compact with rural forest communities in which 25 percent of the revenues from National Forests would be paid to the states for impacted counties in compensation for their diminished local property tax base. By law, these revenues finance rural public schools and local road infrastructure. As one can imagine, these counties relied heavily on this revenue for education and infrastructure.
However, in recent years, the principal source of these revenues, Federal timber sales, has been sharply curtailed due to changes in Federal forest management policy, and those revenues shared with states and counties have declined precipitously. Payments to many counties have dropped to less than 10 percent of their historic levels under this compact. This impact on rural communities and schools has been staggering. The decline in shared revenues has severely impacted or crippled educational funding, and the quality of education provided, in the affected counties. Many schools have been forced to lay off teachers, bus drivers, nurses, and other employees; postpone badly needed building repairs and other capital expenditures; eliminate lunch programs; and curtail extracurricular activities.
Page 14 PREV PAGE TOP OF DOC
Rural communities have also suffered from severe economic downturns causing high unemployment, domestic violence, substance abuse, and family dislocation. They are finding it difficult to recruit new business and to meet the demands of health and social issues associated with the displacement and unemployment. Finally, local county budgets have also been badly strained that communities have been forced to cut funding for social programs and local infrastructure to offset lost 25 percent payment revenues.
In 1993, the Congress enacted a law which provided an alternative annual safety net payment system for 72 counties in the northwest region of the country, where Federal timber sales had been restricted or prohibited to protect the northern spotted owl. This authority for the 1993 safety net program will expire in 2003. No comparable protection has been provided for the other 730 counties across the national which receive forest payments. An equitable system of payments for all forest counties nationwide is needed to protect the ability of these counties to provide quality schools and roads and to allow the Federal Government to uphold its part of the compact.
A Case Study
As members, we have all heard about, and many of us actually have, counties that have been adversely impacted by this compact being broken. I have several in my district, but will focus on Liberty County as a example of how the lost revenue has affected a large portion of this nation and its citizens. This case study shows the various effects that the loss of timber revenue from the Apalachicola National Forest has had on the children and citizens of Liberty County.
Liberty County is a rural county with a population of about 7,000 including 1,300 schoolchildren. That is the smallest county population of schoolchildren in the entire state of Florida. It has a total land area of 525,000 acres, 97 percent of which is forested, with half of that owned by the U.S. Forest Service within the Apalachicola. Until recently, the forest was the mainstay of a strong local forest product-based economy, and through sharing 25 percent of the revenue from timber sales, provided substantial support for the local schools and government.
Page 15 PREV PAGE TOP OF DOC
In 1989, the Forest Service began to manage its land in a different way, mostly to protect the habitat for the endangered red-cockaded woodpecker. It is interesting to note that Liberty County has the only recovered population of this bird in the world. Perhaps the most significant thing about these changes is not the decline in harvest, but rather the fact that in 1998 the net annual growth of timber on the Apalachicola National Forest was about 800 percent greater than the volume harvested. The sawtimber growth is approximately 50 times greater than the volume harvested.
The effects of timber harvest reduction on forest revenues to the 4 counties and school districts within the Apalachicola is that the 25 percent payments have declined in value from a 1987-93, 5 year average (in 1998 dollars) of $1,905,000 to $220,000 in 1998; a loss of 89 percent. Due to this reduction, the Liberty County School District was forced to take several painful steps. These steps included reducing school staffing by 11 positions out of a total of 151; increasing the average class size from 23 to 28 students; discontinuing the enrichment programs in health, computer education, and humanities; discontinuing vocational programs in industrial arts, small engine repair, and electronics (80 percent of the graduates do not attend college); curtailing the school media center; eliminating certified art and music teachers from the elementary school staffs; reducing the Pre-K program, formerly the only program in the state to serve all four-year olds; and terminating a new program in technology acquisition, which would have placed the county on par with other Florida school districts.
The impacts on county government have also been very significant. The County road crew was reduced from 23 to 18 positions. This staff reduction, plus equipment obsolescence and the inability to purchase needed supplies and materials, has resulted in the deterioration of the rural road system. In 1994, the County was forced to float a $1,780,000 bond issue in order to meet current road needs. It is unclear how the county will meet its future road responsibilities in the absence of a substantial increase in the 25 percent payments from timber sale receipts. County employees suffered a 10 percent salary cut, which was partially restored following the imposition of a 1 percent local option sales tax and 7 cents per gallon gas tax. Finally, the Sheriff's Office and Emergency Medical Service have been forced to curtail hours and reduce services. As a result of this action, Liberty County remains the only county in Florida without an advanced life support system as part of the county emergency response organization.
Page 16 PREV PAGE TOP OF DOC
However, the most far-reaching and devastating impact of these declining revenues is the adverse effect on the future of our children. An education system crippled by such funding cuts cannot train our young people in the skills needed to join tomorrow's society as contributing, functioning citizens.
H.R. 2389
It is clear to me that the compact of 1908 is broken and needs to be fixed immediately. That is why I have introduced the County Schools Funding Revitalization Act of 1999 with my colleague Representative Nathan Deal. This legislation is based on principles that were part of a compromise agreement reached by the National Forest Counties & Schools Coalition. This bill is significant because it was developed not by a ''Washington knows best,'' top-down approach, but rather through ''a home-grown,'' bottom-up approach that has finally reached a consensus. This unique coalition includes over 500 groups from approximately 32 states including school superintendents (including Hal Summers, School Superintendent of Liberty County, Florida Schools), county commissioners (including the Columbia County, Florida Board of County Commissioners), educators, several labor groups, the National Education Association and the U.S. Chamber of Commerce.
H.R. 2389 contains two main provisions. First, it would restore stability to the 25 percent payment compact by ensuring a predictable payment level to Federal forest communities for an interim 5-year period. This temporary five-year payment program would be based on the average of the three highest payments received by a state in fiscal years from 1985 until this bill is enacted. This is obviously a necessary step to arrest the current destructive downward spiral. Secondly, the bill requires the Federal Government to collaborate with local community and school representatives as part of the Forest Counties Payment Committee to develop a permanent solution that will fix the 1908 compact for the long term.
Page 17 PREV PAGE TOP OF DOC
There are other options that have been proposed to address this problem, from decoupling forest receipt payments from forest management activities to legislating or mandating timber harvest. My view is that the welfare of schools and county governments cannot be artificially disconnected from the economic stability and social vitality of rural counties. I do not feel that either one of those options is a starter in this Congress. However, I truly believe that the consensus compromise that H.R. 2389 represents is the one possibility that could be passed.
We, the Federal Government, must fulfill the promise made to these communities in 1908. In the part of the country where I come from, a man's word is his bond. Together, we can fix the compact and restore long-term stability to our rural schools and governments and the families that depend on them.
Again, thank you for allowing me the opportunity to discuss the issue of forest timber revenue payments and the solution that Representative Deal and I have developed. I stand ready to try and answer any questions that my colleagues might have.
Mr. HILL. I thank you, Mr. Boyd, for your testimony.
Before we proceed, I would like to ask for unanimous consent for Mr. DeFazio to be able to join us at the dais. Without objection, so ordered.
I want to remind members that Committee rule 3C imposes a 5-minute limit on questions, and the Chair will recognize members for any questions they may have to ask witnesses.
Mr. Sherwood, you are recognized.
Mr. DEFAZIO. Mr. Chairman, is that necessary? I appreciate the unanimous consent, but is that necessary for a member of the full Committee. I thought members of the full Committee could sit on any Subcommittee.
Page 18 PREV PAGE TOP OF DOC
Mr. HILL. That is what we were told by staff.
Mr. DEFAZIO. Thank you, Mr. Chairman.
Mr. SHERWOOD. Thank you.
Mr. Boyd, I am very interested in your first chart that showed the cut on the Apalachicola National Forest and the growth. I realize that you reemphasize those figures for us, but what is your understanding why we find ourselves in that position where growth is 800 times harvest; if I understood you right?
Mr. BOYD. Well, that is a very good question, an appropriate question. I think you need to understand a little bit about the history of the Apalachicola National Forest. The forest was purchased by the Federal Government probably back in the 1930s. It was actually cut over when the Federal Government purchased it, and the United States Forest Service and the government has done a great job in reestablishing the forest. I know Mr. Dombeck is here and can give us more of the specific dates.
But what has happened over the last few years is there is the red-cockaded woodpecker population in the Apalachicola National Forest, and I might say that we have the only recovered population of RCW in the world and probably the largest population in one spot of RCW anywhere in the world.
The point that I would make is that this RCW population has actually thrived over the years with the cutting practices that we were using back in the eighties; but somehow or another the Forest Service policy changed in the early 1990s and our cutting has gone to almost zero. As a result, our county and schools don't get any revenue off of it. I hope that answers your question.
Mr. SHERWOOD. Where did you get your timber volume figures?
Mr. BOYD. They came from the Southeast Forest Experiment Station Resource Bulletin.
Page 19 PREV PAGE TOP OF DOC
Mr. SHERWOOD. When did the policy change? It looks like it maybe is 1991 or 1992?
Mr. BOYD. You can see the graph shows after 1989, you started a downward decline that hit rock bottom in 1995. You actually see—the sawtimber volume is indicated by the dark portion of each bar. The pulptimber, that is the total cutting on each—the total cutting for the forest.
Mr. SHERWOOD. What is the rotation, pulpwood, you need about 35 years?
Mr. BOYD. We need much less. We can cut out pulpwood in those areas of Florida, if you cut on a 25 to 30 year rotation, you actually get a good amount of saw timber. We understand that we have some other objectives in the national forest.
Mr. SHERWOOD. We are so used to talking about western forests in this Committee where it is dry, and timber does not grow that fast.
Mr. BOYD. That is not the case here.
Mr. SHERWOOD. That is what I wanted to establish. I will reserve the rest of my questions until after the chief talks to us.
Mr. HILL. I thank the gentleman, and the Chair recognizes Mr. Smith.
Mr. SMITH. One question on the decoupling issue. Can you explain where you are coming from on that? Obviously the one side of the argument is since timber harvest has been so unpredictable in recent years that tying a significant portion of the local community's budget to that is a questionable policy, even though the original policy of making sure that they were compensated for the fact that this land was put in Federal hands is sound and is necessary. Wouldn't it make sense to find some more secure and stable amount of funding to make up for that instead of having it tied in to the timber sales, which as I understand it, you built some things along the lines of stability but doesn't go to full decoupling.
Page 20 PREV PAGE TOP OF DOC
Mr. BOYD. I think that is correct. The reason that the coalition did not come up with a recommendation to go to decoupling is that the administration has made that recommendation for 2 or 3 years in a row and I don't know that a bill has ever been introduced, certainly I don't believe one has ever had a hearing and moved. Mr. DeFazio can speak greater to that than I can because I think he has a piece of legislation which basically does that.
But our goal here was to stabilize the situation for the 5-year term, put in place this advisory committee which would be made up of seven people as a cross-section of the interested parties here and have them make a recommendation back to Congress as to how we fix this long term.
Mr. SMITH. Thank you.
Mr. HILL. The Chair would recognize Mr. DeFazio.
Mr. DEFAZIO. Thank you, Mr. Chairman.
In clarification, the administration has proposed this as I understand it twice now. This is the second budget cycle in which they have proposed it.
My bill, just to correct the record, both the staff memo and the gentleman's perception, gives a one-time option 5 years out which is after the next regularly scheduled forest planning process at which point I think we would have a good handle on what future harvests might or might not yield and whether counties and schools would be better linking themselves to revenue sharing or to guaranteed payment.
But my question goes to the issue of where the money comes from under the gentleman's bill. It appears to me that the money if it is not adequate in—is going to come out of the Forest Service appropriations, is that where some of the money might come from?
Mr. BOYD. Congressman DeFazio, what the bill—this bill anticipates is that is a decision that would be made by the Forest Service. There was a 1908 compact made between the Federal Government and the local communities, and the Forest Service had the responsibility for implementing that compact.
Page 21 PREV PAGE TOP OF DOC
The Forest Service has changed its management policy in the last 6 to 7 years in such a way that the compact has been rendered essentially useless and so we felt like the Forest Service should make the decision about those issues, about where the funding comes from since it was their policy changes that got us there. Of course we stand ready to work with the Forest Service in any way that we can to make it happen.
Mr. DEFAZIO. Just to disagree slightly with the gentleman, we make policy, not the Forest Service. The Forest Service implements policy. That is a little bit of my frustration with the approach, which is to say if the agency cannot deliver on higher harvests, which are precluded by law as established by Congress, then it will have to come out of their budget, further crippling an agency which doesn't have enough money to perform its mission, whether the mission is to provide benefits to the counties or recreational benefits or other multiple-use benefits. I don't believe the Forest Service has enough money.
So I am concerned that it would appear that we are going to penalize the agency which is implementing the policies which we have established, and this has been my argument with the counties coalition. If we want to have a debate on forest policy, the Chairman could start that debate tomorrow on legislation to change the underlying laws and policies that are under the jurisdiction of this Committee that goes to the level of harvest and mandate high levels of harvest. But instead we are having this sort of back door way of penalizing the agency which really can't do—doesn't have the flexibility.
In my case, in my region the changes came about because of litigation after the Forest Service had drug its feet for years, and they were totally wiped out in the courts. The timber harvest went to zero, and subsequently changes were made that restored some harvest. But I guess the point is maybe it should come out of Congress's budget.
Mr. BOYD. I certainly don't want you to inaccurately characterize what the legislation does because I think it speaks clearly for itself.
Page 22 PREV PAGE TOP OF DOC
You have been here certainly longer than I have and probably understand these issues a great deal better than I do because you have been involved with them. I don't know of any specific legislation that has come out of this Congress which has mandated, since 1990, reduced cutting. But I am sure as a result of certain policies that came out, the Forest Service took it upon themselves to change their management policy and I certainly understand that part.
That is why we have set up what we think is a reasonable 5-year temporary fix and put together the advisory committee to help us develop a long-term solution. The alternative is to bury our heads in the sand and go along like we have. And in the meantime, we continue to have these funding problems in our schools and with our local governments down there.
I want you to know, Mr. DeFazio, I stand ready to work with anybody. I have been hollering and screaming about this issue for several years, even before I got into Congress. I don't know exactly how to answer your question except to say that it is the Forest Service management policy that has changed over the last few years that has reduced the revenues to our local governments.
Mr. DEFAZIO. To whom does the committee make the recommendation for changes in policy?
Mr. BOYD. To the U.S. Congress.
Mr. DEFAZIO. That goes back to the point that I made. The changes in forest policy management do go to a whole host of Federal environmental laws and court precedents that have been set. And if this Congress wants to mandate higher harvest levels, we can do that, which means that there are underlying policies that were created by laws by the Congress that have driven the management by the Forest Service.
I mean, yes, there is a little bit of wiggle room, but under the last administration that wanted to harvest a lot more timber in the Pacific northwest than the law apparently allows, the courts just enjoined them. I think you might find in your forest if they try to ignore the red-cockaded woodpecker or other mutiple-use concerns and endangered species concerns, whatever your concerns are in your forest, you might end up under an injunction that wipes out that whole little bar that you have left there. I am not sure that we are—I agree on your basic premise. And the hurt and pain, I have seen it. The amount of timber that you harvested at the maximum was the amount of timber harvested in the smallest ranger districts in my region, and so I understand the pain. I am sympathetic, but I want to keep my eye on the ball and that is the money.
Page 23 PREV PAGE TOP OF DOC
Mr. BOYD. If I might because when Mr. DeFazio asked the last question, he asked it in such a way maybe I didn't answer it correctly. You said who the advisory committee makes the recommendations to about the policy changes. We are not—we don't ask the advisory committee to make recommendations about policy changes. We ask them to make recommendations about how to solve this problem. I want to make that very clear. I can see if you thought that the advisory committee was going to be advising the Forest Service about how to do its cutting, that is not what we asked them to do. We are asking them to make recommendations to the U.S. Congress about how to solve this problem so that the Federal Government can keep its compact with the local communities that it established in 1908.
Mr. HILL. I thank the gentleman. Carrying on with that same topic, we can't pass a decoupling bill or targeted timber harvest bill in this Congress. This is an effort to compromise those two positions and come up with something that we can move forward with.
Mr. BOYD. You said it better than I could, Mr. Chairman.
Mr. HILL. Thank you very much.
The issue here is bigger than just the funding of schools and counties. One of our goals here is stable economies and stable communities. Isn't that one of the objectives of this bill?
Mr. BOYD. That is correct. I didn't talk about that because there are several impacts on local communities. One is on your school system and another is on your local county government and both of those have to do with tax issues. The third impact is on the economy and many of these communities rely heavily on the forest or timber industry as the backbone of their economy, which has been ripped away from them. We are not sure that we will solve all of those questions over the years, but at least we ought to make an effort as to how we can help solve this funding problem with the school systems and local governments.
Page 24 PREV PAGE TOP OF DOC
Mr. HILL. And this is consensus legislation. It is bipartisan and a broad spectrum of different groups that are supporting it; isn't that correct?
Mr. BOYD. That is correct. You have people all of the way from the National Educational Association to the U.S. Chamber of Commerce and labor groups. I think that is about as much consensus as you can get.
Mr. HILL. Are you aware of any coalition that is supporting Mr. DeFazio's bill or the administration's proposal with regard to decoupling?
Mr. BOYD. I am not. That does not mean that there is not somebody out there supporting it, it just means that I am not aware of it.
Mr. HILL. Let's go back to the issue of decoupling. I happen to agree with your feelings about decoupling. I have a couple of examples, more than a few examples, where there are decoupled payments from the Federal Government. The most common is Indian reservations where we have impact aid and other payments. The point is that they don't have sustained economies. They don't have stable economies. Would you just address this issue of decoupling; why decoupling is a mistake in your view?
Mr. BOYD. Well, I believe there is always a chance, particularly in some of the things that we have seen happen in the U.S. Congress in the last few years, that if the issue becomes decoupled, then it becomes an easy appropriation to just let go away eventually. So that is one of the reasons.
The other reason is because even though the administration has proposed it now for two budget cycles, it has not caught on with anybody. We were looking for something that might be able to give us a short-term fix again and establish a committee that will make some long-term recommendations on solutions.
Mr. HILL. One last question. If there is one important point that you want this Subcommittee to keep in mind, what is it do you think that the Subcommittee should remember from this hearing?
Page 25 PREV PAGE TOP OF DOC
Mr. BOYD. I think that in Liberty County, Apalachicola National Forest, in the mid-eighties, this school system got almost $2 million out of this program which was a very important, significant part of its funding for children. And that was in exchange for the Federal Government owning land and diminishing the tax base which would be the normal revenue base for the schooling.
Now that has gone to 10 percent of that number, and our class sizes have increased from 23 up to 28. We have had to lay off teachers and bus drivers. We have obsolete equipment. We have done away with our pre-K program. Those are significant issues. It is affecting the education of our children in that community.
Mr. HILL. I thank you very much, and I thank you for your excellent testimony. If there are no other questions, you are excused.
Mr. BOYD. Thank you, Mr. Chairman, and Members.
Mr. HILL. I would like to introduce our next panel, Mr. Mike Dombeck, Chief of the U.S. Forest Service; Mr. Bob Douglas, Tehema County Superintendent of Schools, Red Bluff, California; Mr. Glen Spain, Pacific Coast Federation of Fisherman's Associations; Mr. Bobby Green, Chairman, Lane County Board of Commissioners, Eugene, Oregon; and Mr. William N. Dennison, Plumas County Supervisor, District 3, Chester, California.
The Chairman will recognize Mr. Dombeck.
STATEMENT OF MIKE DOMBECK, CHIEF OF THE U.S. FOREST SERVICE
Mr. DOMBECK. Thank you, Mr. Chairman. It is always an honor to appear before this Committee, and today our topic is to testify on the Timber-Dependent Counties Stabilization Act of 1999 and the County Schools Funding Revitalization Act of 1999 and to discuss the Department's proposal on this same topic, and I would like to introduce Associate Deputy Chief Sandra Key who is here with me as a technical expert and knows all of the numbers.
Page 26 PREV PAGE TOP OF DOC
I will talk about the Department's proposal first. As you are aware, the proposal which we have submitted for a second year really focuses on a number of things. Number one, to provide stability and predictability to counties. I think I am struck when I heard just the statements of Congressman Boyd and the questions of how much—how many common goals we have in this effort. Predictability and stability are those, and the fact is that social services and schools, roads are very important. And I am one that grew up on a national forest and attended one of those schools in one of those districts, so I am somewhat familiar with it.
Our second objective is to provide reasonable payments to compensate counties for national forest lands that are not available for the local tax base.
A third objective is mandatory permanent payments not subject to annual appropriation, not subject to the unpredictability that county commissioners and others deal with; and perhaps the last issue that there is some concern over, and that is the connection between controversial timber sales to critically important local services and how we can avoid some of the instability from litigation injunctions and things like that that are really out of the control of the Congress and the Forest Service.
Let's talk about the stability issue first. I have a graph that really points out the trends.
[The information follows:]
Mr. DOMBECK. As we move to the right, what we see is a 36 percent reduction from 1989 to the present. And if the safety net had not been put into place for the O&C counties and the west side counties in Oregon, the slope of that curve would be even significantly further down from where it is right there. As you see, our projections of where payments to counties, where we would predict that they would go based on the information that we have are also listed there and then the squares across the top indicate some sort of stability that our proposal provides, and we think that is a real important objective.
Page 27 PREV PAGE TOP OF DOC
Secondly, I just want to reaffirm the commitment of the Forest Service to providing some level of payment to the counties understanding that in many cases there are large portions of the tax base that are not available because of the national forest lands that are there. The children of the Forest Service employees go to these same schools, use the same roads as other residents in those communities. The concern about the unpredictability of the appropriations process, to fund to the authorized levels, I know are concerns here; and that is why we feel some sort of mandatory payment is important. We have a permanent mandatory appropriation now on the 25 percent fund, so really what we are looking at there is no change to make this a permanent fund because it is already a permanent fund. It is already mandatory.
Lastly, the distinction between a social services, a moral imperative for our children's education, do we really want to tie that to controversial issues like timber sales where we know the controversies are looming, and how can we move away from that. It is my belief that tightening the connection will further inflame the controversy rather than make it easier.
The fact is should education issues be driving national resource decisions? Wouldn't they be better dealt with as education issues and as funding issues rather than mixing the two in an already fairly complex situation because the fact is that resource management has been controversial since the days of Gifford Pinchot and will continue to be controversial because of the simple fact that as our country grows, there is not enough for everyone to have all of what they want. And so we have to share, and the real debate is about balance as much as anything else.
With regard to the County Schools Funding Revitalization Act, I think there is a lot of agreement there. However, we strongly oppose that piece of legislation for a couple of reasons. Number one, it doesn't provide long-term stability beyond 5 years.
Secondly, the funding provisions for the payments could create significant impacts on Forest Service programs like recreation, fish and wildlife programs because of the provisions there, and it doesn't separate payments from controversial issues like timber sales. And we are also concerned about the establishment of another committee since we already have congressional concerns over the complexity of legislation and issues that really play into Forest Service policies.
Page 28 PREV PAGE TOP OF DOC
With regard to Mr. DeFazio's bill, we see a lot of commonality there and think that through some amendments we could really move forward with that. The issue of stability is important. The issue that I am somewhat concerned about and I am happy to enter into a dialogue on, we know what the problems are today so why would we wait 5 years to put a decision off. At any rate, I think it is important that these issues are being discussed here today, and I am happy to answer any questions you have after the panel has made its statements.
Mr. HILL. Thank you Chief Dombeck for your testimony.
[The prepared statement of Mr. Dombeck follows:]
STATEMENT OF MIKE DOMBECK, CHIEF, FOREST SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE
Thank you for your invitation to testify on H.R. 1185, ''Timber-Dependent Counties Stabilization Act of 1999,'' and H.R. 2389, ''County Schools Funding Revitalization Act of 1999.'' I appreciate the opportunity to join you today to continue the dialogue that the Administration began last year on the need to provide a stable, permanent level of payments, commonly known as the twenty-five percent fund, and to separate the payments from National Forests receipts. With me this afternoon is Sandra Key, Associate Deputy Chief, Programs and Legislation from the Forest Service.
As you are aware the Department of Agriculture has also submitted to Congress proposed legislative language that would make payments to states permanent and at an increased level over what is forecasted with the twenty-five percent fund payments.
Department's proposal, ''The Stabilization Act of 1999.''
The Department's proposal will:
(1) provide a stable, predictable payment that counties can depend on to help fund education and maintenance of roads,
Page 29 PREV PAGE TOP OF DOC
(2) provide increased payments above the payments projected under current law to compensate states for National Forest lands that are not available to the local tax base,
(3) provide a mandatory, permanent payment not subject to the annual appropriation process, and
(4) sever the connection between timber sales and critically important local services.
First, we need to provide a stable, predictable payment that counties can depend on to help fund education and road maintenance. Under 16 U.S.C. 500, (commonly known as the twenty-five percent fund), twenty-five percent of most Forest Service receipts are paid to the states for distribution to the counties in which National Forest lands are located for financing public roads and schools. Historically, the primary source of National Forest receipts has been from the sale of timber on National Forests. Over the past 10 years, timber harvest from National Forests has declined 70 percent in response to new scientific information, changing social values, and our evolving understanding of how to manage sustainable ecosystems. During that same period, payments to states made under 16 U.S.C. 500 have been reduced 36 percent; from $361 million in 1989 to $228 million in 1998.
Under the Department's proposal, states will receive the higher of the 1998 fiscal year payment or a new special payment amount. The special payment amount will be 76 percent of the average of the 3 highest payments made to the state during the 10 year period from fiscal years (FY) 1986 through 1995 of both twenty-five percent fund payments and payments under section 13982 of the Omnibus Budget Reconciliation Act of 1991 The special payment amount will not exceed the 1998 FY payment by more than 25 percent. The special payment amount will pay the states approximately $269 million annually, representing an additional $27 million above the existing baseline in FY 2000, $72 million in FY 2004, and $259 million more over the next five years.
The special payment is modeled on the formula used in what was referred to as the ''owl county safety-net'' adopted by Congress in 1990 as a provision of the Interior and Related Agencies Appropriations Act. The provision was adopted at the request of certain counties in western Washington, Oregon, and northern California affected by decisions relating to the Northern Spotted Owl. It was renewed annually until 1993 when Congress authorized a 10 year, gradually declining, payment stabilization formula which will expire in 2003. We chose 76 percent of the historic baseline because that was the level of the owl county safety-net payment guarantee when the Administration first proposed to stabilize payments over a year and a half ago.
Page 30 PREV PAGE TOP OF DOC
Second, we want to provide a reasonable payment, based on all benefits of National Forest lands, to compensate states for these lands that are not available to the local tax base. Historically, states received payments based on revenues generated from commodity extraction, primarily timber. For a variety of reasons, including new scientific information about the sustainability of our resources, commodity extraction from our National Forests has been reduced. National Forests continue to provide a myriad of benefits to local communities—jobs, income generation, recreation and tourism, timber and mining, hunting and fishing and so on. Payments made through the payments in lieu of taxes program are often not appropriated to their fully authorized levels, creating difficulties for counties with a limited tax base due the presence of public lands. Our proposal ensures that states continue to benefit from both the intrinsic and economic value of public lands by guaranteeing a payment to make planning and budgeting predictable for counties. Thus, we propose that states receive a permanent, stable annual payment based upon a percentage of historic payment averages.
Third, the payment needs to be excluded from the annual appropriation process. We cannot rely on either revenues or the annual appropriation process to produce a consistent, reliable level of funding. The Department's proposal will provide a mandatory, permanent payment to states from the general fund of the Treasury.
Fourth, we must make distinct and separate the social and moral imperative of cildren's education from the manner that public forests are managed. Both activities, children's education and forest management, are essential but continuing to link the two activities together could continue to reduce funding for children's basic education needs.
There has been resistance to this proposal. In part, the resistance may stem from a belief that timber harvest levels will rise dramatically again in the future. This belief is mistaken: (1) timber harvest has steadily declined over the past decade, and (2) in FY 1999 and FY 2000, the Administration and both Houses of Congress each proposed as part of the appropriations process timber offer levels that were below 4 billion board feet, including salvage opportunities. It is highly unlikely that timber harvest levels will return to the 11 billion board feet volume of the early 1990s.
Page 31 PREV PAGE TOP OF DOC
Continuing the connection—or tightening it as one of the two congressional proposals before us today would do—will only serve to ensure that payments to states will continue to be tied to controversial forest management issues.
Separating payments to states from the receipts generated from the sale of commodities and user fees will allow for a stable, reliable increased level of funding for the states and counties.
H.R. 1185, ''Timber-Dependent Counties Stabilization Act of 1999''
The Administration supports the objectives of H.R. 1185, but will seek amendments to more closely align this bill with the Department's proposal. For FY 2000 through FY 20004, this legislation will provide stable payments to states based on an amount equal to 76 percent of the average of the 3 highest twenty-five percent payments made to the state during the 10 year period from fiscal years 1986 through 1995 (special payment amount).
In addition, the bill would provide that after FY 2004 each state will make a one time permanent, binding choice of receiving either the twenty-five percent payment or the special payment amount. This will give states the option to have a permanent, stable payment, not based on revenue generation, or to continue with the decreasing, unpredictable twenty-five percent fund payments. While this is definitely a step in the right direction, it simply puts off decisions which can and should be made today. The Department prefers to ensure that all states receive a permanent stable payment as is provided in the Department's proposal.
This legislation also provides for the special payment amount to be adjusted to reflect changes in the consumer price index for urban uses. The Department's proposal does not reflect changes in the consumer price index, but we are willing to work with the Subcommittee to discuss the additional funding that this will require.
Page 32 PREV PAGE TOP OF DOC
H.R. 2389, ''County Schools Funding Revitalization Act of 1999''
Again the Department agrees with one of the objectives of H.R. 2389, that is to stabilize payments, but strongly oppose this bill for the following reasons: (1) it does not provide a stable payment past 5 years nor does it provide for a mandatory payment to states from the general fund of the Treasury, (2) the funding provisions for FY 2000-2005 payments could create significant impacts on Forest Service programs and (3) it does not separate payments to states from the contentious, controversial debate over natural resource management of the National Forests, but only fuels this debate by establishing an advisory committee to address issues concerning management of our National Forests.
First, H.R. 2389 would only temporarily stabilize payments to states for a five year period beginning in FY 2000. Under this bill, the short-term payments for fiscal years 2000 through 2005 would be the twenty-five percent fund payment for the fiscal year or the full payment amount, whichever is greater. The full payment amount would be equal to the average of the three highest twenty-five percent fund payments or the owl county safety-net payment during FY 1986 through FY 1999. This formula would yield a payment that is over $170 million more than the $269 million that is available for the Department's proposal. Since current payment levels equal $227 million for FY 2000, falling harvests would need to double in order to fund the higher payments to state levels, or the Forest Service will have to significantly reduce non-revenue producing programs. In addition, after 5 years this issue will have to be addressed again. Assuming this issue will not be easier to resolve, then payments to states will return to the twenty-five percent fund payments resulting in a significant reduction in funding for education and roads.
Second, under the Department's proposal, payments to states will be made automatically from the general fund of the Treasury and will not be subject to the annual appropriation process. In contrast, H.R. 2389 will fund the difference between the twenty-five percent fund payment amount and the full payment amount from revenues received from activities on National Forest lands and funds appropriated for the Forest Service. Forest Service appropriations that fund programs generating revenues for the twenty-five percent fund, and funds from trust funds or other special accounts established by statute for specified uses will not be eligible to fund this difference. Under this provision, in FY 2000 the Appropriations Committees will have to either increase Forest Service funding or divert over $170 million from Forest Service programs such as fire suppression, watershed improvement, wilderness, wildlife and fisheries that do not generate revenue. This is neither tenable nor appropriate.
Page 33 PREV PAGE TOP OF DOC
Third, H.R. 2389 will fail to separate payments to states from the debate over the management of National Forest lands. In fact, the bill would only fuel this debate by continuing to make the payment amount dependent on decisions relating to natural resources management. Most significantly, the bill would establish an advisory committee charged with developing recommendations for a long term method for generating payments at or above the full payments amount. The advisory committee will be required to ''seek to maximize the amount of . . . revenues collected from Federal lands'' and to ''ensure that this method is in accord with a definition of sustainable forest management in which ecological, economic and social factors are accorded equal consideration in the management of the Federal lands.''
The concept of maximizing revenues collected from National Forests is a fundamental change in Forest Service policy and direction. There is nothing in the Organic Act or National Forest Management Act (NFMA) that requires optimization of revenues. For the last 30 years, Congress has declined emphasizing economic return over natural resource management needs. To do so now is a major reversal to long-standing, carefully hammered out policy. NFMA certainly recognizes the important contributions of economic products from the National Forests, but it also recognizes that such production should be within the ecologically sustainable limits that also preserves our children's economic future.
We strongly believe that payments to states for the purposes of funding schools and roads should not be thrust into the middle of the debate over the appropriate management of our natural resources.
Closing
Since 1908, the twenty-five percent fund has worked well to provide funding for local schools and roads. But as demands on our National Forests have increased and timber harvest has declined we need to provide a stable, permanent mechanism for making payments to states.
Page 34 PREV PAGE TOP OF DOC
Madam Chairman, the Department supports the objectives of H.R. 1185, but we prefer a complete separation between the payments to states and revenue generation from National Forests. The Department strongly opposes H.R. 2389 because it neither provides a permanent stable payment to states nor separates payments to states from the controversial debate over management of our National Forests. We recommend that you consider our proposal to provide a permanent, predictable payment that states can depend on to help fund schools and roads. We would be pleased to work with the Subcommittee to pursue options that might meet our respective goals.
This concludes my statement; I would be happy to answer any questions you and the Members of the Subcommittee might have.
Mr. HILL. Mr. Douglas, you are recognized.
STATEMENT OF ROBERT E. DOUGLAS, TEHEMA COUNTY SUPERINTENDENT OF SCHOOLS, RED BLUFF, CALIFORNIA
Mr. DOUGLAS. Thank you for the opportunity to testify in support of H.R. 2389. The bill is based upon the National Forest Counties and Schools Coalition principles, as you mentioned. Our coalition is a rapidly growing collaborative of 500 organizations from now 35 States. Our office administers the coalition, and I serve as the chief administrative officer.
Mr. Chairman, I would like to enter into the record a list of the organizations which support the coalition.
Mr. HILL. Without objection.
Mr. DOUGLAS. Our organization has grown very rapidly since founded in March 1999, primarily because the citizens of the 800 forest counties in America, all of whom are represented in one way or another by the organizations in our coalition are having a common experience. As a group these counties are enduring economic instability as a result of the deep decline in resource-based activities on Federal forest lands, they are experiencing devastating social disruption and decimated public school and county services.
Page 35 PREV PAGE TOP OF DOC
Nationally, U.S. Forest receipts have declined precipitously since 1989. In 70 forest counties which are protected by the Northwest Forest Plan, the declines have been in the 21 to 24 percent range to date. However, in the 730 forest counties not protected in the Northwest Plan, the declines in receipts have ranged from 75 to 90 percent as Congressman Boyd noted.
Public schools and county governments have, out of necessity, slashed programs and services. Five to ten years of steeply declining receipts have literally eviscerated the breadth and quality of school and county services in most of these counties.
In an urban or suburban setting, the vast majority of property is private or industrial, and it is possible to offset these losses in revenues through a variety of taxes or assessments.
In forest counties where 50 to 96 percent of the land is nontaxable Federal forest land, this possibility simply does not exist. This fact was recognized by the Congress and the founders of our Federal Forest System almost a hundred years ago when huge blocks of land were set aside to form our national forest reserves.
When we removed those lands from private ownership, revenue production and local tax generation, the counties of America protested the impact on public service support. Gifford Pinchot, Congress, and the President agreed that 25 percent of the annual revenue from management of those lands would be given to schools and counties as mitigation for the effects of land removal.
This was a compact with the people of rural counties. These funds have been for almost a hundred years a mainstay of support for forest counties and schools. We honored that compact until the late 1980s when by agency policy, administration regulation and injunction, the active management of our forest system was severely restricted. The historic compact with the people of forest counties has been broken and disregarded for almost a decade.
Page 36 PREV PAGE TOP OF DOC
For these reasons, we propose H.R. 2389 which is a two-phased resolution to revitalize county and school support. It proposes a short-term safety net for forest counties designed to protect public schools and county services over the next 5 years. Given the economic and social deterioration in these counties, it is absolutely essential that we revitalize and stabilize their infrastructures.
Second, in order to address the larger and more significant systemic problem, which includes not just school and county government support but also the economic and social health of our communities and the health and sustained multiple use of our Federal forest lands, we are proposing the creation of a national committee appointed by Congress to develop recommended legislation and/or policy revisions, a focused national conversation over the next 5 years devoted to defining a long-term solution to our Federal forest management practices. And the resultant effects upon long-term sustainable health, community and social stability, and the vitality and effectiveness of school and county infrastructures is critically needed in our country. In the meantime, the current laws regarding the payments to States should remain untouched.
Our bill provides such a mechanism. This is a systemic problem, and it must be solved with a systemic solution. We believe that the Forest Service and the Bureau of Land Management must continue to have incentives to actively manage Federal forests for the production of materials for our Nation to generate resources for the Treasury and payments to counties and schools and also be diligent about the active healthy management of our national forests.
We strongly believe that payments to counties and schools unconnected from corollary improvement in economic self-determination and improved social conditions will not work. Neither will payments to counties work, which are unconnected to incentives to actively manage, on a sustained basis, the dominant economic asset in forest counties, the forest land itself.
Page 37 PREV PAGE TOP OF DOC
All of these factors are connected parts of an ecological and social system and any long-term solution must achieve a balance between these factors. Forest Counties and Schools Coalition urges your support of H.R. 2389. It meets the immediate and critical needs of forest counties and schools while providing a blueprint for the construction of a long-term solution to our current forest management gridlock and its attendant consequences.
Thank you very much, Mr. Chairman.
Mr. HILL. I thank you, Mr. Douglas.
[The prepared statement of Mr. Douglas follows:]
STATEMENT OF BOB DOUGLAS, NATIONAL FOREST COUNTIES AND SCHOOLS COALITION
Thank you for the opportunity to provide testimony in support of H.R. 2389. This bill is based upon and reflects the principles upon which the National Forest Counties and Schools Coalition is based (see Appendix A). The National Forest Counties and Schools Coalition is a rapidly growing collaborative of over 500 organizations from 32 states. My office currently administers the Coalition and I serve as the Chief Administrative Officer.
Mr. Chairman, I would like to enter into the record, a list of those organizations which support the National Forest Counties and Schools Coalition Principles and this legislation. Our organization has grown very rapidly since it was founded in March 1999. This is primarily due to the fact that the citizens in our eight hundred (800) forest counties in America, all of whom are represented by organizations in our Coalition, are having a common experience. As forest related communities, they are all enduring economic instability as a result of the precipitous decline in resource based activities on Federal forest lands, devastating social disruption, and decimated public school and county services.
Nationally, U.S. Forest Reserve receipts have declined by 65 percent since 1989, (See Appendix B). In the seventy (70) forest counties which are protected by the Northwest Forest Plan, the declines have been approximately 21 percent to date. However, in our 730 forest counties not protected in the Northwest Plan, the declines in receipts have ranged from 75-90 percent (See Appendix C).
Page 38 PREV PAGE TOP OF DOC
Public schools and county governments have, out of necessity, slashed programs and services. Five to ten years of steeply declining receipts have literally eviscerated the breadth and quality of school and county services in most of these counties.
In an urban or suburban setting, wherein, the vast majority of property is private or industrial, it is possible to raise offsetting revenues through a variety of local taxes and/or assessments. In forest counties where 50-96 percent of the land is non-taxable Federal forest land, this possibility simply does not exist. Given the exceptionally small non-Federal land base, it is impossible to locally offset the loss of Forest Reserve or O & C BLM receipts.
This fact was recognized by the Congress and the Founders of our Federal forest system. Almost one hundred years ago when our National Forest system was formed, huge blocks of land were set aside to be Federal Forest Reserves. These lands were removed from the possibility of private ownership, revenue production, and local tax generation for county government and schools. Not surprising, there was a hue and cry from forest counties nationwide about the local economic impact. Gifford Pinchot, Congress, and the President agreed that 25 percent of the annual revenue from the management of these Federal forest lands would be given to schools and counties as mitigation for the effects of this land removal.
This was a ''Compact With The People of Our Rural Forest Counties.'' These funds have been, for almost 100 years, a mainstay of support for rural schools and counties. The Compact was honored and protected until the late 1980's, when by Federal agency policy, administrative regulation, and injunction, the active management of our National Forest System was severely restricted. During the last decade, this historic Compact with the People of our forest counties has been broken and disregarded.
For these reasons, H.R. 2389 proposes a two-phase solution to revitalize county and school support. First, it proposes a short-term safety-net for our forest counties designed to protect public schools and county services over the next five years. Given the economic and social deterioration in these counties, it is absolutely essential that we revitalize and stabilize their infrastructures. Second, in order to address the larger and more significant systemic problem, which includes, not just school and county government support, but also the economic and social health of our communities, and the health and sustained multiple use of our Federal forest lands, we are proposing the creation of a National Committee appointed by Congress to develop recommended legislation and/or policy revisions. These recommendations will emphasize increasing receipt generation, minimizing adverse budget impacts, promoting economic benefits to schools and counties, while simultaneously ensuring healthy, long-term sustained use of our National Forest lands.
Page 39 PREV PAGE TOP OF DOC
We strongly believe that these recommendations can and should be formulated during the first three years of the safety-net and then submitted to the Administration and Congress for their consideration. It is further our belief that these recommendations should be enacted into law within two years of their receipt by Congress.
A focused national conversation devoted to defining a long-term solution to our Federal forest management practices and their resultant effects upon long-term sustainable forest health, community economic and social stability, and the vitality and effectiveness of school and county infrastructures is critically needed in our country. This bill provides such a mechanism. This is a systemic problem and it must be solved with a systemic solution. The current laws regarding payments to states should remain untouched. Specifically, the Coalition is adamantly opposed to decoupling or disconnecting county and school payments from actual gross forest receipts. We believe that the U.S. Forest Service and the Bureau of Land Management must continue to have incentives to manage the National Forests for the production of materials for the nation, to generate resources for the Treasury and payments to counties and schools and be diligent about the active healthy management of our National Forests. It is possible to have sustained-yield multiple-use forests which produce materials for our Nation, revenue to support local community infrastructures, provide the economic and social vertebrae for local communities, and simultaneously provide wildland fire protection, pure watersheds to sustain our urban and suburban population centers, and maintain ecologically healthy forests. These are mutually compatible and not mutually exclusive goals. There are those in our society today that are spending millions of dollars on advertising, public relations, and legal fees to convince us that this is an ''either/or situation'' when in reality, we know that these goals are compatible. Consequently, we strongly believe that payments to counties and schools, unconnected from the corollary improvement in economic self-determination and improved social conditions will not work. Likewise, neither will payments to counties work, which are unconnected to incentives to actively manage on a sustained basis, the dominant economic asset in forest counties—the forest land itself. All of these factors are connected parts of an ecological, economic and social system, and any long-term solution must achieve a balance between these factors.
Page 40 PREV PAGE TOP OF DOC
We believe that this can and must be done for the benefit of our rural counties and schools and the long-term health of our Federal forests. The Forest Counties and Schools Coalition urges your support of H.R. 2389. It meets the immediate needs of forest counties and schools while providing a blueprint for the construction of a long-term solution to our current forest management gridlock and its attendant consequences.
Thank you.
Mr. HILL. The Chair recognizes Mr. Spain for your testimony.
STATEMENT OF GLEN SPAIN, PACIFIC COAST FEDERATION OF FISHERMAN'S ASSOCIATIONS
Mr. SPAIN. Thank you, Mr. Chairman. Let me explain a little bit of our interest here. We are the largest organization of commercial fishermen in the West Coast and many of our people have been salmon fishermen. Salmon is the number two forest-dependent industry in the West Coast. Salmon, just 10 years ago, provided over 62,000 jobs and $1.25 billion to our economy. Much of that is in jeopardy because of past forest practices that have devastated watersheds and put over 25 different major runs of salmon on the endangered species list, with more to come.
The reality is that a lot of past practices in the forest on public lands were simply unsustainable. They could not continue without doing major damage to industries such as ours, to municipal water supplies which are heavily dependent on those forest watersheds, and to a variety of other economic sectors. That is one of the reasons that a lot of the harvest has been cut back, and I think those are sound public policies toward sustainability in the future. It is not just salmon. Sport fishing is a $108 billion industry, is in every State in this country, and in many of those States those fisheries are dependent on public lands.
The real issue and the real cause of the crunch is not even reduction in harvest because we have seen, as a result of globalization, harvest go up whereas the timber job base and the timber industry goes down because of automation. The real issue is globalization. If you look at the difference between 1908 and 1999, today we live in an interlocked global timber economy. At this point in time, this is causing enormous competitive pressure on the timber industry, a reduction in the timber job base, and particularly important for this schools 25 percent payment structure is that it causes enormous fluctuations in the price of timber.
Page 41 PREV PAGE TOP OF DOC
Take the stumpage price. Some of the facts and figures, if you look at the real numbers, you find that in the 1980s there was a huge collapse of stumpage prices, almost six-fold losses for county payments. Payments are 25 percent of the price that timber fetches. If the price collapses because of global markets, this is because of problems in the Japanese economy that were basically linked to our timber markets because of global interests. You find, for instance, in 1985 to 1993, in Oregon, the State I live in, just in an 8-year period of time, the stumpage price went from $100 per thousand board feet to $623. That is a 623 percent change in 8 years.
If you look at Federal timber sales, the situation is even worse. Between 1993 in eastern Oregon and 1997, there was roughly a seven-fold change in timber stumpage prices. You cannot build a county budget on that kind of instability, frankly. We do not live in the same world as we did 100 years ago where these prices were relatively stable and within the control of local and national forces.
At this point it makes no sense to continue to hold county budgets hostage to international timber markets in Singapore, Japan, and the Philippines. One of the reasons we have seen current stumpage prices collapse is because of economic instability in Asia. Again, these collapses were due to global market forces, not timber harvest policy, more than anything else.
Now, looking at the various bills in front of you, they all have good elements, and they all have missing pieces. What we would propose as a bill that would do the job would be one along the administration's policy for fixed payments in perpetuity outside of the appropriations process, and as Mr. Dombeck pointed out, that is what we already have. I think Mr. DeFazio's bill does that, too.
Perhaps Mr. Boyd's bill does that, but only for 5 years. Payments should also be indexed for inflation. The DeFazio bill and Mr. Boyd's bill do that. The administration's does not. I don't think that they can do it without congressional approval. It should also be management neutral. The current system works fine.
Page 42 PREV PAGE TOP OF DOC
I don't think, frankly, that taxpayers in this country will put up with special management deals being cut in back rooms without all public taxpayers being able to participate in the process.
So whatever we need, we need something that is management neutral and basically not special interest driven. There should be a choice made. In most every instance, the administration's deal is a good one. I provided in my testimony, in the back of my testimony, a chart showing how that impacts Oregon. That will make a $21 million plus difference to Oregon just in the current proposal.
Now we do not take a position on the precise formula. Seventy-six percent, a hundred percent, you know, what average? That is negotiable. I have talked to people in the administration and a lot of people on the Hill, and that is all negotiable. Numbers can be supplied by the Forest Service upon request in terms of comparisons to past practices.
In summary, I think you really need a bill, and it needs to come out of this Congress this session, that breaks the link between county budgets and Singapore and Philippines timber markets which are out of our control, subject to massive fluctuations without notice, outside of anything that we have any control of, and which causes the instability that a lot of these counties are suffering from.
A stable payment program is on the table in every proposal. There is no argument with that. What we are arguing over is the details. I would submit my testimony for the record, and I would be happy to answer any questions.
[The prepared statement of Mr. Spain follows:]
Mr. HILL. Mr. Spain, thank you very much for your testimony. We do have a vote on the final passage of the military construction. And so what I would do is recess, propose a recess for about 15 minutes, let's say until 10 after, and then we will pick up the testimony of the last two witnesses if that is agreeable with everyone.
Page 43 PREV PAGE TOP OF DOC
Thank you very much. We stand in recess for 15 minutes.
[Recess.]
Mr. HILL. We will reconvene the hearing. Thank you all for your patience.
Our next panelist is Mr. Bobby Green, chairman of the Lane County Board of Commissioners. Mr. Green.
STATEMENT OF BOBBY GREEN, CHAIRMAN, LANE COUNTY BOARD OF COMMISSIONERS, EUGENE, OREGON
Mr. GREEN. Thank you very much for the opportunity to speak before this Committee. I really appreciate the opportunity. I would like to tell you about Lane County and much of this will sound very familiar to you and others. But I think it will be helpful in your process and ultimately hope it would lead to some sort of a decision at some point in time.
Lane County is one of the most unique counties in the United States. It is about the size of Connecticut with more than a third of a million people. Our land stretches from mountain ski slopes to ocean sea shores. Most Lane County citizens live in Oregon's second largest urban center, the Eugene-Springfield metro area.
We are a microcosm of the U.S. counties reliant on Federal forest policies. Forest land comprises 88 percent of Lane County. The United States Government, the U.S. Department of Agriculture, Forest Service, and the U.S. Department of Interior, Bureau of Land Management, owns more than half of the county, 54.2 percent to be precise. Lane County, Oregon is home to one of the largest combined Federal and O&C forest properties in the United States today. Because the county is more than half federally owned or managed, a unique partnership with the Federal Government was created almost a hundred years ago.
Page 44 PREV PAGE TOP OF DOC
Since 1908, Oregon schools and local governments have had a good partnership with the U.S. Forest Service. Timber resources from the Federal lands are used to provide raw materials for developing industry and economic growth. Funds from selling these materials provide education for our citizens. The funds pay for the transportation system to get the raw materials to the market. They provide resources to the Federal agencies administering the lands. They assist the Federal Treasury. The partnership has worked extremely well in Lane County.
While we continue to diversify our economic base, the timber industry still provides 6,900 jobs in our county. Lane County's owl guarantee portion alone has provided an additional $22 million to help educate Oregon's children. In addition, it funded $66 million to maintain and modernize 1,500 miles of roads and bridges in Lane County's transportation system. These roads are heavily used by the timber industry and Federal agencies as timber moves to the mills and the marketplace.
National forest timber revenue is used to finance the planning, design and construction of new county roads and bridges. All of these services are at risk of severe reduction or complete elimination on June 30, 2004, if no changes are made to the current system. That is when Lane County expects to lose close to $12 million a year. The history of the Oregon & California railroad lands, O&C, is long, unique, and quite colorful. Lane County's O&C lands comprise about 2.4 million acres of forest land managed by the BLM.
Before 1903, these lands were in private ownership and available as resources for local government taxation. Because the O&C railroad failed to comply with Federal law and after much litigation, including a case that went all of the way to the United States Supreme Court, these lands were revested in the Federal Government. In 1938, the Federal Government granted 50 percent of the revenues from the O&C land to counties.
With the partnership, counties could use the funds to provide vital public health and public safety services to its citizens, despite the fact that more than half of the county is exempt from taxation. In 1952, the O&C Association formed a partnership with the BLM, both parties agreed that one-third of the counties' share of timber revenues be reinvested in managing the lands to improve future harvests.
Page 45 PREV PAGE TOP OF DOC
For years it worked extremely well, turning Oregon and California railroad lands into some of the country's most productive forest land. Unfortunately, just as counties were about to get a return on their investment, Federal forest policy changed. As a result, counties did not get the return. Over time through this plowback, O&C counties voluntarily returned more than $2 billion in timber revenues to the BLM. Lane County's share of this lost investment is more than $314 million.
About 25 percent of Lane County's general fund is financed by O&C timber revenue. It is used to pay for critical public safety and health services. In fact, 75 percent of the discretionary funds provide services such as immunization, communicable disease control, county jail and rural police patrols. It is a dilemma. We are one of many counties who have partnered with the Federal Government for nearly 100 years in sharing the Federal timber receipts. Lane County is different from other counties because the Federal Government owns 54 percent of us, all of this forest land.
This means only 46 percent of the property in our county is taxable. What is more, because of our unique partnership, we did not increase property taxes as did some Oregon counties. As a result, our tax rate alone cannot totally support our public safety and health services. In plain English, our budget relies on the current owl safety net.
If guaranteed timber payments are not stabilized, the county cannot recoup its loss. Even if the citizens want to make up the difference, they can't. Why? Because in 1997, a State imposed property tax limitation prohibits any county from permanently increasing property tax.
We relied in good faith on our partnership with the Federal Government. Now we are afraid this reliance will cripple our critical public safety, health services, and transportation if Congress does not stabilize the payments. The bottom line, if our Federal Government decides to take a big chunk of Oregon's Federal forest land out of timber production, counties should be compensated. Also, if the harvestable timber sales quantity is cut or eliminated to satisfy the administration's or Congress' competing policy objectives we should be compensated as well.
Page 46 PREV PAGE TOP OF DOC
We are certainly aware of the tight Federal budget. However, almost 100 years ago we made a deal with the Federal Government and we have upheld our end of the deal by providing health services, public safety, and roads. Now we call on Congress to ensure that the Federal Government upholds its part of the bargain. We urge you to seriously consider and adopt a viable stabilization plan.
I would like to call your attention to the fact that the Lane County Board of Commissioners has carefully considered how best to solve the problem of counties relying on Federal forest funds. And on June 2, 1999 the board voted unanimously on a resolution backing the Federal action to stabilize the payments. And Mr. Chairman, for the record, I would like to submit this resolution which was unanimously endorsed by the Lane County Board of Commissioners if I may at this time.
[The information follows:]
Mr. GREEN. Given that, the resolution goes on to speak to four points.
Continue payments in perpetuity, number one.
Number two, provide for inflationary increases.
Three, revert to the actual harvest receipt formula if payments ever drop below the original funding formula. If receipts ever go above the original formula, Congress should review the appropriations.
Four, allow counties to participate in the land management decisions. Given the immediacy of the issues we cannot endure a prolonged debate over best forest management practices.
We believe the best and most practical approach is to stabilize our partnership with the Federal Government and in order to permanently provide for the maintenance of critical services for our citizens.
Page 47 PREV PAGE TOP OF DOC
Thank you, Mr. Chairman, for the opportunity to testify, and I stand ready to answer any questions which come forward.
Mr. HILL. I thank you, Mr. Green.
[The prepared statement of Mr. Green follows:]
STATEMENT OF BOBBY GREEN, CHAIRMAN, LANE COUNTY BOARD OF COMMISSIONERS
Lane County is one of the most unique counties in the United States. It is about the size of Connecticut with more than a third of a million people. Our land stretches from mountain ski slopes to ocean seashores. Most Lane County citizens live in Oregon's second largest urban center, the Eugene-Springfield metro area. We're a microcosm of all U.S. counties reliant on Federal forest policies. Forest land comprises 88 percent of Lane County. The United States government—the U.S. Department of Agriculture, Forest Service, and the U.S. Department of the Interior, Bureau of Land Management—owns more than half of the county, 54.2 percent to be precise.
Lane County, Oregon is home to one of the largest combined Federal and O&C forest properties in the United States today. Because the county is more than half (54.2 percent) federally owned or managed, a unique partnership with the Federal Government was created almost 100 years ago.
Since 1908, Oregon schools and local governments have had a good partnership with the U.S. Forest Service. Timber resources from Federal lands are used to provide raw materials for developing industry and economic growth. Funds from selling these materials provide education for our citizens. The funds pay for the transportation system to get the raw materials to the market. They provide resources to the Federal agencies administering the lands. They assist the Federal Treasury.
The partnership has worked extremely well in Lane County. While we continue to diversify our economic base, the timber industry still provides 6,900 jobs in our county.
Page 48 PREV PAGE TOP OF DOC
Lane County's ''Owl Guarantee'' portion alone has provided an additional $22 million to help educate Oregon's children. In addition, it funded $66 million to maintain and modernize 1,500 miles of roads and bridges in Lane County's transportation system. These roads are heavily used by the timber industry and Federal agencies as timber moves to the mills and the marketplace.
National forest timber revenue is used to finance the planning, design and construction of new county roads and bridges. All of these services are at risk of severe reduction or complete elimination on June 30, 2004. If no changes are made to the current system, that's when Lane County expects to lose close to $12 million a year.
The history of the Oregon & California Railroad lands (O&C) is long, unique and quite colorful. Lane County's O&C lands comprise about 2.4 million acres of forest land managed by the Bureau of Land Management (BLM). Before 1903, these lands were in private ownership and available as resources for local government taxation. Because the O&C Railroad failed to comply with Federal law, and after much litigation, including a case that went all the way to the United States Supreme Court, these lands were ''revested'' in the Federal Government.
In 1916, Congress directed a portion of the resources to the counties. However, little funding actually made it to local governments. Future Federal acts continued to provide that a portion of the proceeds be given to counties.
In 1938, the Federal Government granted 50 percent of the revenues from O&C lands to counties. With the partnership, counties could use the funds to provide vital public health and public safety services to its citizens, despite the fact that more than half the county is exempt from taxation.
In 1952, the O&C Association formed a partnership with the Bureau of Land Management (BLM). Both parties agreed that one-third of the counties' share of timber revenues be reinvested in managing the lands to improve future harvests. For years it worked extremely well, turning Oregon & California Railroad lands into some of the country's most productive forest lands. Unfortunately, just as counties were about to get a return on their investment, Federal forest policy changed. As a result, counties did not get the return. Over time, through this plowback, O&C counties voluntarily returned more than $2 billion in timber revenues to the BLM. Lane County's share of this lost investment is more than $314 million.
Page 49 PREV PAGE TOP OF DOC
About 25 percent of Lane County's general fund is financed by O&C timber revenue. It is used to pay for critical public safety and health services. In fact, 75 percent of the discretionary funds provide services such as immunizations, communicable disease control, county jail and rural police patrols.
It's a dilemma. We are one of many Oregon counties who have partnered with the Federal Government for nearly 100 years in sharing Federal timber receipts.
Lane County is different from other counties because the Federal Government owns 54 percent of us—all of it forest land. This means only 46 percent of the property in our county is taxable. What's more, because of our unique partnership, we did not increase property taxes as did some Oregon counties. As a result, our tax rate alone cannot totally support our public safety and health services. In plain English, our budget relies on Federal timber money.
If guaranteed timber payments aren't stabilized, the county cannot recoup its loss. Even if citizens want to make up the difference, they can't. Why? Because in 1997, Oregon voters adopted Ballot Measure 50, a property tax limitation measure that prohibits permanent increases in the property tax rate.
We've relied in good faith on our partnership with the Federal Government. Now we're afraid this reliance will cripple our critical public safety, health services and transportation if Congress does not stabilize the payments.
THE BOTTOM LINE—If our Federal Government decides to take a big chunk of Oregon's Federal forest land out of timber production, counties should be compensated. Also, if the harvestable timber sales quantity is cut or eliminated to satisfy the Administration's and Congress' competing policy objectives, we should be compensated as well.
We are certainly aware of the tight Federal budget. However, almost 100 years ago, we made a deal with the Federal Government and we've upheld our end of the deal by providing health services, public safety and roads. Now we call on Congress to insure that the Federal Government upholds its part of the bargain. We urge you to seriously consider and adopt a viable stabilization plan.
Page 50 PREV PAGE TOP OF DOC
I'd like to call your attention to the fact that the Lane County Board of Commissioners has carefully considered how best to solve the problem of counties reliant on Federal forest funds, and on June 2, 1999, the Board voted unanimously on a resolution backing Federal action to stabilize payments and asking to:
(1) Continue payments in perpetuity.
(2) Provide for inflationary increases.
(3) Revert to the actual harvest receipt formula if payments ever drop below the ''original'' funding formula. If receipts ever go above the original formula, Congress should review appropriations.
(4) Allow counties to participate in land management decisions.
Given the immediacy of the issue, we cannot endure a prolonged debate over best forest management practices. We believe the best and most practical approach is to stabilize our partnership with the Federal Government in order to permanently provide for the maintenance of critical services for our citizens.
Thank you for this opportunity to testify, I will be happy to answer any questions.
Mr. HILL. The final panelist is Mr. William Dennison from Plumas County, Supervisor, District 3, Chester, California.
STATEMENT OF WILLIAM N. DENNISON, SUPERVISOR, DISTRICT 3, PLUMAS COUNTY, CALIFORNIA
Mr. DENNISON. Thank you very much, Chairman Hill, Subcommittee members and full Committee members.
Page 51 PREV PAGE TOP OF DOC
I am Bill Dennison, Plumas County, District 3, Supervisor. I am speaking on behalf of Plumas County Board of Supervisors, the National Association of Counties, Regional Council of Rural Counties, which is in California, and the California State Association of Counties. The National Association of Counties has a membership of 1,857 counties. There are 800 counties that are forested in the United States that receive this revenue from the Federal timber sale receipts program. You are addressing a very important issue to all of us, and we thank you for that.
Congressman Boyd did a great favor by documenting a lot of the reasons for the importance of that Act of 1908 so I will not belabor that except to point out the fact that in 1908 the General Accounting Office report contains a statement which is very important to us today; and they said, and I quote, since the early 1900s, the Congress has enacted more than 20 laws directing that a State or county be compensated for a Federal presence in the state. It was a promise that was made in 1908. It has been reaffirmed 19 other times, and it is a promise that must be sustained as you have heard from other members today.
You are aware that the timber sale receipts have been decreasing, but I want to tell you about Plumas County because it is very close to us there where the Federal lands constitute 73 percent of the land base, and our revenue has been reduced from almost $9 million per year to $1 million per year. The $4 million lost for each of the school and the road systems have been very severe, and I can provide you with more data. And I have done that in my written statement.
In summary, our roads are deteriorating, and our school children's education is being impacted. It is for those reasons that we entered into a broad coalition, the greatest I have ever seen. I wish we had those years ago, things would have been different, I believe. We didn't have them. We have them now. It is a grassroots movement that is potent that should be listened to. But entering into those understandings, we came up with principles that have been noted; but I want to just briefly go over those again.
Page 52 PREV PAGE TOP OF DOC
This corrective legislation must cover all of the national forest counties nationwide. Secondly, the payments are to be guaranteed based on 100 percent of the 3 highest years during the period of 1986 to the date of the passage of the bill. That is not a small decision that was made. We found in our compromise in our discussions if we did not do that, some of the Eastern counties would be losers; and so we brought them into the fold and thought that was a good way to go. The administration proposal to restrict the base to 76 percent of the period between 1985 and 1996 would penalize some of these States.
The either or language has been included to allow for payments to ensure that you can get as good or better payment in case your receipts are higher. That is a reasonable thing. The CPI indexing has been noted before, but most important, and we have talked about this already, is the decoupling. And we believe there should be no change in the Act of 1908. There should be no decoupling of the payments from the production of our national forests as proposed by the administration. The last principle relates to the fact that we wish this legislation to be short term, a short-term financial safety net with a means to pursue a long-term resolution toward securing the delinquent revenues. That is covered under section 7 of the bill.
We agree that land use management should not be for the sole removal of trees, but good management will, in fact, remove some trees during the process. That is why we supported the passage of the house when you acted on the Herger-Feinstein-Quincy Library bill, that great vote of 428 to 1 before.
We supported you on that. That is why we now view that bill as a means to a long-term solution to the issue before us today.
I have a copy and a longer written statement, Mr. Chairman, and a copy of an 8-page article in the July 1999, Smithsonian magazine, A Town Buries the Axe. I would like to include those in the record.
Mr. HILL. Without objection.
Page 53 PREV PAGE TOP OF DOC
All of the panelist's written testimony will be part of the record.
[The information follows:]
Mr. DENNISON. I hope you have seen the Smithsonian report on the Quincy Library Group. It highlights the balanced management approach which you all embraced through that QLG bill as a means to protect against catastrophic wild fires. We are waiting for the final environmental impact statement completion by Forest Service so we can work together to begin that adaptive management process and have it utilized eventually not just in our area.
We think that it is applicable to many places throughout the Nation, but this is going to take a couple of years and in the meantime, our counties need help. I suggest we should not be here talking about what the level of the cuts should be. That is another issue. We should be talking about how can we get the job done. Certainly there are some controversial issues, and I agree with Chief Dombeck on that. However, I think some of the things that were happening with the grassroots coalition, we can work some of these things out so they are not so controversial in the future. And there can be increases in timber harvest with sound environmental practices as well. We must strive for that goal.
In closing, I would call to your attention again that Smithsonian report. A past Plumas County supervisor, Bill Coates, my predecessor, was quoted in the article as saying the following. Mr. Coates said, ''America needs its rural America. You can't live in Ohio and visit Plumas County unless there are hospitals there, unless there is law enforcement, unless there are roads to drive on. You have to have local infrastructure so if they get hurt, we can treat them. If they get lost we can find them. To keep that fabric together,'' Mr. Coates said, ''the people of the town have to unite to work together to put aside their differences for the good of the town and for the good of everyone.''
Chairman Hill and Committee members, that is the reason that I am happy to be with you today. We are not asking for handouts or entitlements. We are not asking that you determine the forest management level here today. We are asking for the opportunity to unite and develop a means by which the forest management funding system will serve the purpose for which it was intended. If rural communities are to be in a position to continue to serve the Nation, there must be more consideration of the resources for which they are willing and able to provide, and at the same time there is a need to fulfill the promises of our Federal Government to pay its fair share for maintaining our county schools and our roads.
Page 54 PREV PAGE TOP OF DOC
To that end, we thank you for the support of H.R. 2389.
[The prepared statement of Mr. Dennison follows:]
STATEMENT OF WILLIAM N. DENNISON, SUPERVISOR, DISTRICT 3, PLUMAS COUNTY, CALIFORNIA
CHAIRMAN CHENOWETH AND MEMBERS OF THE COMMITTEE:
I am Bill Dennison, Plumas County Supervisor; District 3, in California. We are situated in Northern California, north of Sacramento and west of Reno Nevada. Today, I am speaking on behalf of the Plumas County Board of Supervisors and the National Association of Counties (NACo). I chair the NACo Public Lands Steering Committee, which shares a great concern in our issue today, since 800 counties throughout our nation receive revenue from the Federal timber sale receipts program. We are part of the Forest County Schools Coalition which currently has endorsements from over 500 groups in 32 States and is growing daily. You are addressing a very important issue.
Thank you for scheduling these legislative hearings and for the opportunity to convey support for H.R. 2389 and the reasons why such a bill is necessary.
A United States General Accounting Office report to past Congressman Vic DeFazio contains a statement which summarizes an important part of the issue before us today: ''Since the early 1900's the Congress has enacted more than 20 laws directing that a state or county be compensated for a Federal presence in the state.'' Congress recognized that the formation of the National Forests were large-scale withdrawals, with acreages being as high as 50 to 90 percent of some counties gross acreage's. Local government was concerned there would not be adequate tax base to provide appropriate public services. The substantial opposition to this action on the part of the Federal Government was mitigated by the Act of 1908 and as noted by GAO has been reaffirmed 19 more times over the years. It was a promise to the people that must be sustained. This compensation has been provided in varying percentages, but for the most part 25 percent of the gross receipts from commercial national forest activities have been distributed to counties through state government for the use of schools and roads. (16 U.S.C. 500). Over 95 percent of those funds have been from timber sale receipts.
Page 55 PREV PAGE TOP OF DOC
Recent changes in national forest land management philosophy and practices have caused large portions of the National Forests to be considered off-limits for commercial activities. Some of these changes have been initiated by law, some by agency policy change and some may be temporary, as agencies search for scientific truths to answer the intricacies of the Endangered Species Act and other conflicting laws which have been passed by Congress over the years. The end-result has been an average loss of about 75 percent of county revenue from Federal timber sale receipts.
In my County of Plumas, Federal lands constitute 73 percent of the land base and our revenue has been reduced from almost $9 million to about $1 million during the last 8 years. Plumas County has only a population of 22,000, with a local budget of $44 million. We are experiencing the impact of the $4 million dollars lost per year to each of the school and road departments.
It requires $4.1 million to properly operate the public works department. Our Plumas County Director of Public Works has recently reported that this year revenues are estimated to be $1.8 million from gas tax and $0.5 million from the 25 percent timber sale receipts. The remainder of the budget must come from our diminishing reserve, which will be depleted in 2 years. The director reported that he began the reduction in asphalt paving 3 years ago and chip sealing of the roads 2 years ago, in order to maintain a reasonable reserve. That fact is recognized in the obvious road deterioration throughout our county, but the degradation will accelerate if we can not return to a regular road maintenance program.
Next year, if there is not a replacement of the lost timber sale receipts revenues, we have been told that there may be a reduction in snow removal services. We receive snow depths of 2 to 3 feet in a given storm with total depths up to 10 feet in northern Plumas County. The loss of snow removal potential presents a severe deterrent for our emergency services, which include health, fire and law enforcement. These are often life-threatening situations, not a luxury forgone.
Page 56 PREV PAGE TOP OF DOC
The next budget considerations which the Board of Supervisors will be forced to face will be personnel reductions in two years, or less.
Our Plumas County Unified School District Superintendent, Dennis Williams made visits to the Hill with the Quincy Library Group the past two years in recognition of the financial crises he has been facing. Mr. Williams reported to me last week that school budget cuts, as a result of decreased forest receipt revenues has resulted in the following impacts:
• Class size has increased in grades 4-12 to a 30:1 student:teacher ratio.
• All funding was eliminated for all extra-curricular activities but some has been restored over the past two years as a result of a temporary Necessary Small School funding provision from the State.
• Custodial and maintenance staffs have been reduced.
• School site supply budgets have been reduced.
• High school counselors were eliminated.
• Administrative staff was reduced.
• Transportation was reduced by eliminating several bus stops.
I have attached a chart and a graph which depicts the forest receipts history of reductions to the Plumas County School District.
It is for these reasons that a nation-wide coalition was formed to pursue legislation that is based on the following principles:
• The corrective legislation must cover all National Forest Counties nationwide, including the Oregon and California (O&C) Counties. This is important because the impact of Federal land policy changes are being felt from the Atlantic to the Pacific.
Page 57 PREV PAGE TOP OF DOC
• Payments are to be guaranteed based on 100 percent of the three highest years during the period 1986 to the date of passage of a Bill. This is an important factor, because some of the eastern forests have increased their sale program over the past couple of years. The Administration's proposal to restrict the base to 76 percent of the period between 1985 and 1996, would penalize these eastern states. The imposition of a cap on the total increase to a county, as proposed by the Administration is also unfair and unacceptable.
• ''Either/or'' language must be included to allow for payments based on actual receipts if the amount is greater than the short-term guaranteed payment level. (See Section 5, subsection (b)(2).)
• CPI indexing should be included. (See Section 4, subsection (b).)
• Most important, there must be no changes to the Act of 1908. The proposal for changes by the Administration during the past year has been coined a ''decoupling'' from production of our national forests. This constitutes an entitlement which the coalition is unwilling to accept. There are several good reasons for this position:
First, we believe that the national forests are in terrible condition and must be managed. We face catastrophic wildfires that can best be minimized through strategic removal of trees. Reinvestment in our watersheds, not lock-up of our resources is the right thing to do.
Secondly, the management of these lands provide products and jobs for our nation that far exceed the 25 percent timber sale revenue. It is important that in the long-term the Act of 1908 and those 19 Congressional passed Bills that followed are upheld to assure that the revenues and production are not separated.
Third, our nation should not initiate more entitlements, when there are means to pay for programs through our existing resources.
• The last principle relates to the fact that we are only requesting a short-term ''safety net'' and the means to pursue a long-term solution to securing the delinquent revenues. We believe that the latter is set forth in Section 7. DEVELOPMENT OF LONG-TERM METHODS TO MEET STATUTORY PUBLIC SERVICES. Under item (c) (2) you will note that we wish to increase the revenues, but only where ''. . . ecological, economic and social factors are accorded equal consideration in the management of Federal lands.'' The Committee shall terminate three years after the date of the enactment of this Bill. That and the provision that payments to eligible States and eligible counties are to be replaced by a long-term solution within two years after the date of submission of the report required by Section (7)(c)(1), is indication of ou