Register-Guard Guest Viewpoint: Governor reinforces timber harvest status quo

http://www.registerguard.com/web/opinion/28914664-47/timber-panel-oregon-tax-federal.html.csp
By Roy Keene
Published: October 23, 2012
Eugene Register-Guard

In an Oct. 13 Register-Guard article about the creation of a panel to resolve Oregon’s perceived timber problems, Gov. John Kitzhaber is quoted as saying, “The status quo is unacceptable.”

Ironically, in seeking a solution that focuses solely on accelerating federal logging, the governor has narrowly framed a “solution” that maintains the status quo.

Kitzhaber’s panel is reminiscent of a panel formed by President Clinton in 1993. Clinton’s “round table,” also proposing to “protect the environment, create jobs and help restore funding,” compromised court decisions, existing laws and the best science to “unlock” federal forests for more logging.

Clinton’s panel never addressed corporate forest liquidation, rampant log exports and huge timber tax subsidies.

Kitzhaber’s panel also omits these vital issues — and it further restricts honest solutions by considering only federal forests managed by the Bureau of Land Management. Focusing solely on increasing timber volume, there’s no mention of increasing the dollar value of our timber. Panel members, including Oregon’s largest federal timber purchasers, might correct this folly if they didn’t extract windfall profits from purchasing federal timber in a historically depressed log market.

To escape big timber’s status quo and seek more equitable ways to bolster local timber supplies, revenue and rural jobs, why not reduce or tax Oregon’s rampant log exports? Tripling over the last three years, exports constitute more than one-third of our state’s total annual timber harvest. Exports in the second quarter of 2011 alone were three times the BLM’s entire 2010 timber harvest.

For every job gained because of log exports, four domestic wood products jobs are lost. This explains why Oregon’s timber harvest has risen 35 percent in three years while overall employment has changed little and wood products employment has actually decreased.

Two-thirds of Oregon’s timber harvest comes from industrial forests. The multinational corporations that liquidate forests and export the logs degrade our water, wildlife and fisheries. Why do we let them get away with paying no harvest tax, comparatively little property tax, and no tax on standing timber? Although this is a triple whammy for Oregon’s environment, jobs and revenue, don’t expect the governor’s carefully vetted panel members to raise these issues.

For example, Oregon law requires policymakers to regularly examine tax subsidies, called “tax expenditures,” to see whether they are fair. Oregon’s 2011-13 Tax Expenditure Report shows a largely undeserved tax exemption granted on the value of standing timber in Western Oregon costing us $394 million biennially. The report says these “expenditures (subsidies) provide special benefits to favored individuals, resulting in higher tax rates for all individuals.”

Along with exploring fair taxes for corporate forest owners, the panel should seek ways to increase the value the public receives from the sale of their timber.

To increase dollar-per-board-foot value, logging should occur when timber prices are up, not down. In 2008, in a depressed market, the BLM logged three times more timber than it did in 2001, when log prices were twice as high.

Such imprudent timing violates an important tenet of the 1937 O&C Act: “To sell “as much (timber) as can be sold at reasonable prices in a normal market.” Logging profits could be tripled per unit of wood by selling our timber in a robust market at real value. When public timber is logged in low markets simply to supply domestic mills, it just becomes an unfair substitution for exported logs.

The State Land Board is required “to maximize long-term revenue to the Common School Fund.” So why is the land board pushing up harvest levels on the Elliot State Forest in this low market?

We could realize three times the dollars per board foot (or cut a third as many trees to produce the same revenue) by selling the Elliot’s mature timber to the highest export bidder, just like industry does. The law requires maximizing revenue to the schools, not feeding our high-value timber at low prices to a few big automated mills so they can pseudo-process it and ship it overseas.

Lobbyist Andy Kerr walked from Kitzhaber’s panel, saying “The effort is fatally flawed because it allows clearcutting of federal forests.” Is Kerr defending his own proposal to substantially increase federal logging by thinning instead of clearcutting? This effort is flawed way beyond dueling silvicultural prescriptions.

Kitzhaber’s panel promises far more serious economic and ecological plunder. Backing U.S. Rep. Peter DeFazio’s effort that would result in the de facto privatization of 1.5 million acres of federal O&C land, the panel ignores the dismal history of turning public forests over to timber industry control. More unfortunately, the governor’s panel avoids the crucial timber issues of corporate forest liquidation, massive log exports and unfair taxes.

Kitzhaber, in declaring the timber status quo to be “unacceptable,” has commissioned a panel that will predictably reinforce it.

Roy Keene of Eugene has brokered private timber and practiced forestry for 35 years in Oregon.