Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, February 23, 1991 TAG: 9102250261
SECTION: EDITORIAL PAGE: A-9 EDITION: METRO
SOURCE: T. RICHARD BEARD JR.
DATELINE: LENGTH: Medium
The below-cost issue began in the late 1970s when preservation groups challenged Forest Service timber-sales profitability and finances. Their position was based on a series of accounting studies.
A below-cost timber sale is usually one where costs exceed revenues. While individual timber sales may lose money, and timber programs on some national forests may run a deficit, the Forest Service timber-sale program is an overall money-maker. These sales return millions of dollars annually to the U.S. Treasury as well as to local governments, which get 25 percent of the proceeds of timber sales in lieu of property taxes.
In fiscal 1990, the Forest Service timber program returned a net profit of $629 million to the treasury. Of that amount, the federal government provided $327 million in 25-percent funds to local governments.
The results from fiscal 1990 also show that 65 of the 122 national forests had higher expenditures than revenues. But the 57 forests that made money cut 84 percent of the timber volume for all the national forests, which indicates a gain in overall revenue.
There are a variety of reasons that the Forest Service conducts below-cost timber sales. They include: the salvage and recovery of dead and dying timber (e.g., from Hurricane Hugo); improvement of a forest resource, such as enhancement of habitat for wildlife; prevention of epidemics of insects and diseases; and long-term cultural investments such as thinnings in timber stands.
Let us also recognize that it is not only the wood-products industry that is to blame for below-cost timber sales. Preservationists, such as the Wilderness Society, have also contributed to the problem. Through massive filings of administrative appeals and litigation, preservationists have required the Forest Service to spend time and dollars answering each challenge; strangled the sale of timber on many national forests, causing reduced sales revenue; and increased the burden of fixed program costs on the reduced volume sold and harvested.
The editorial mentions the amortization periods of the Nebraska National Forest and the Coronado National Forest in Arizona. There are no commercial timber programs in either forest.
The Nebraska National Forest is a manmade forest, built in the 1930s, that cut a total of 701,000 board feet of timber in 1990. This is insignificant in terms of timber sales. The Coronado National Forest harvested 1 million board feet in 1990, a harvest consisting of no saw timber, no roundwood, only firewood for the residents of Tucson, Ariz. Yes, firewood.
As for amortization, the Forest Service recognized its shortcomings. A "Big 10" accounting firm asked for recommendations on improving amortization. A new method was agreed upon and will be used in 1991 computations.
Individual sales need not recover actual costs. The 1960 Multiple Use Act charged the Forest Service with managing the national forests for a variety of uses, "and not necessarily the combination of uses that will give the greatest dollar return or the greatest unit output."
Political pressures may be mounting toward shifting taxpayer funds more to recreational uses. The budget for fiscal 1992 provides $245 million for recreational uses in the national forests. Of this, only $44 million would be collected from recreational and user fees.
Also, $31 million would be used to manage wilderness areas, which collect no recreational or user fees. Has anyone ever questioned the revenue earned from outfitters, resort operators and others who benefit from the recreational uses of our forests?
The national forests exist to benefit all of the American people, and they should. We remember this before we criticize the forest products industry.
Responsible reporting in the media depends heavily on gathering all of the facts.
***CORRECTION***
Published correction ran on Feb. 26, 1991 in the editorial section.\ T. Richard Beard Jr., whose letter appeared on this page Feb. 23, is a representative in Southwest Virginia of E.N. Beard Hardwood Lumber Inc.
Memo: Correction