3 Nov 2008, 1:47pm
Private land policies
by admin

Higher timber taxes not the answer

By Bob Zybach, Guest Viewpoint, Eugene Register Guard, Nov. 3, 2008 [here]

I am in full agreement with Bill Barton of the Native Forest Council’s characterization of the recent award of $740 million over the next four years to Oregon’s timber counties as “federal welfare” (guest viewpoint, Oct. 21). Very little of that money will be used to create much-needed tax-producing jobs, and none of it would be necessary at all, if only our federal lands were better managed.

I disagree with virtually everything else Barton states, however, and the manner with which he states it.

Barton’s basic argument is that, because the federal dollars equal about $10 per year for each of the 18 million acres of federal forestlands in Oregon, and because private forestlands pay about $1.25 per year tax on each of their 11 million acres, private lands should start paying more taxes and stop exporting timber. That, he says, will help finance schools and roads and allow federal lands to “recover.”

First, the “federal welfare” Barton decries will last only four years, and private property taxes are forever. Second, federal lands pay no taxes at all. But third, and most importantly, federal lands have been all but closed to active management for nearly 20 years, are being incinerated in “let-it-burn” wildfires and left to rot without salvage — and all without producing any meaningful income for our schools and roads. Another way to look at these figures, according to the Oregon Department of Forestry, Oregon State University and the Pacific Northwest Forest Experiment Station, is that Oregon’s forest industries support 190,000 direct and indirect jobs with a total of $22 billion in annual economic output — about 11 percent of the total output for all of Oregon. Nearly 85 percent of that amount comes from the 11 million acres of private lands, and only about 15 percent comes from the 18 million acres of federal forestlands.

That is, the majority of Oregon’s forestland — those lands managed by the federal government — produces about 27,000 jobs and $3.3 billion in economic output, while only one-third of the land — privately owned and annually taxed — accounts for more than 160,000 tax-producing jobs and more than $18 billion in output. That’s a lot of unfunded schools and roads in timbered counties, and it renders Barton’s $10 vs. $1.25 per acre tax argument nearly meaningless.

Also debatable is Barton’s claim that “there is no sound environmental reason to log.” There are, of course, many sound environmental reasons to log, including homes for shelter, furniture, heat, paper and packaging in our cities; and beauty, sunlight, recreation, robust wildlife populations and reduced wildfire risks in our forests.

Barton touts the values of “standing” forests as producing clean air and water, topsoil and “biodiversity.” These are exactly the same values realized by a managed forest. And what happens when the standing trees are blown over in a windstorm, as often happens, or killed by bugs or fire?

Barton claims that our “precious” lands could be allowed to “recover” and that these lands “would provide carbon sequestration, flood control, clean air, clean water, and a plethora of wildland experiences to a community that treasures them.” Again, these are exactly the same values already realized from our “pre-recovered” forests. What is Barton missing?

Why the seemingly urgent need to stop managing forest lands, and why is that called “recovery”? Do lawns recover after they are mowed, or orchards after they are picked? Or do they just keep growing and producing, so long as they are properly tended?

Finally, there is the inflammatory rhetoric with which Barton expresses his delusional charges. One example is, “the logging industry … has trashed our drinking water, wiped out our fish runs and pushed several species to the brink of extinction.”

Of course, logging has done no such thing, as must be obvious to any Oregonian who enjoys fishing or drinking water — or knows anything factual about the state’s wildlife history.

Another example of Barton’s rhetoric: “the publicly funded death of our forests” sponsored by U.S. Sen. Ron Wyden and Rep. Peter DeFazio, who are “firmly in the pocket of dishonest corporate interests.”

Why would “dishonest corporations” want to finance the “death” of Oregon’s forests (whatever that means), if that were even possible? Who would vote for such untrustworthy political representatives in the first place? What is Barton really trying to say here about Oregon politicians, voters and businesses? And where is he getting his information?

Barton’s use of such bluster and invective serves only to discredit him and his organization. His uses of hyperbole, dubious statistics and baseless charges likewise undermine his credibility as a critic.

In summary, Barton’s words do not make good sense and should not be taken seriously. Oregon needs more jobs, not more taxes; better forest management, not less.

Bob Zybach of Eugene is a forest scientist with a doctorate from Oregon State University in the study of catastrophic wildfires. The former owner of a reforestation business, Zybach has been program manager for Oregon Websites and Watersheds Project Inc. (www.ORWW.org) since 1996.

3 Nov 2008, 1:57pm
by Mike N.

Apparently Barton is poor at math, hence unqualified to advise the Native Forest Council. We know something about this as few academics do, because the feds and state have their drinking straw in our revenue big time. I give the math below with which anyone can argue if they want to try.

Barton ’s egregious math centers on omissions, something an engineer should not be guilty of, and which don’t help his credibility. Specifically, his arguments about the forest industry being subsidized fail to acknowledge the huge payments in long-term capital gains made every time a stand of timber is cut that didn’t represent a big cash outlay. Last time I cut timber on which I gained $500/M net stumpage revenue, I contributed a big chunk of that to the State of Oregon, and even more to Uncle Sam. This is a much larger chunk of change than is paid in income taxes to the workers that processed it. My taxes on sales like this amount to over $2,000/acre on each acre harvested. Who is subsidizing whom?

Why do you suppose folks keep timber lands in timber if they don’t make a long-term profit when they could sell to developers for a fortune now? Give me a break. Even with the break from capital gains, we pay a hell of a lot of taxes. Presuming that we don’t live as long as the timber we grow, inheritance taxes will take a huge bite from anything inherited, depending on estate tax rates at the time, which have mercifully decreased but to an uncertain future. If the White House and both houses of Congress tilting left of center, there is no telling whether we can keep woodlands in the family in the face of confiscatory taxation. I digress. Below are some day-to-day tax costs Barton might find interesting:

Do the math. Suppose we paid almost nothing for 60 acres of land and manage it on a 60-yr cutting cycle. Suppose we operate harvest and rehab on one acre each year. We control brush and plant, and in today’s dollars invest $700 getting trees to grow on that acre. Suppose we also sell each year an acre of 60-yr-old timber yielding 50MBF/acre. These are our major transactions on the 60 acres. Income, after deducting logging and hauling costs, from the timber sale is $300-500/MBF, or $15,000 to $25,000 for that acre, which is the only revenue from the property if there are no thinnings. The capital gain is between $14,300 and $24,300, minus some miscellaneous expenses like land taxes for the whole property, road maintenance etc, total annual cost of about $1,000. Net taxable income is $13,000-$23,000 on which we pay 15% in federal taxes plus 10% state taxes. The feds take in $1,900 per year or $30-55 for each of our 60 acres, and they do this every year indefinitely. And that is on top of property taxes (running about $7/ac/yr) and $4/MBF harvest (severance) taxes. These are round numbers, but reflect the range of reality. In short, woodland owners pay quite a lot more than the feds contribute as “in-kind” support!

Some subsidy, and Wyden and DeFazio didn’t have a damned thing to do with it! We’ve done the math every way possible. I’m still looking for a subsidy (not that I really want one). I have been looking for some westside land for a long time that pays $1.25 in taxes per acre! Some real potential for profit there…



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