Be Careful What You Wish For

A House Natural Resources Committee bill would turn national forests into fiduciary trusts mandated to produce both a minimum amount of timber and a minimum amount of revenues for the counties in which the forests are located. Thus, the Antiplanner’s original proposal to turn federal lands into fiduciary trusts become increasingly warped.

A fiduciary trust requires a trustee (who manages the trust), a beneficiary (who gets the benefits of the trust), a trustor (who sets up the trust), and a trust corpus or assets that are to be managed. Trusts differ from ordinary government agencies in that the trusts are obligated to manage the assets solely for the beneficiaries, which is a lot simpler than the multiple jobs of most agencies (create jobs, help local clients, keep politicians happy, etc.).

The Antiplanner’s original idea was that public lands would be managed by two trusts. One would produce maximum revenue by selling, leasing, or otherwise permitting various land uses. Some of the revenues would go to the Treasury but some would go to the second trust which would be obligated to maximize the value of any non-revenue producing resources such as endangered species. The amount of revenues the first trust would produce would depend on how much it could profitably produce without harming the long-term productivity of the land (which trustees are also obliged to protect). The second trust could use some of the revenues to buy or lease resources from the first and not use them if it felt that would be the best way to achieve its mission of maximizing non-market values.

Recently, Oregon Representative Peter DeFazio (D) proposed (with help from the Antiplanner’s faithful ally, Andy Stahl) to turn western Oregon BLM lands into two trusts. But instead of letting one fund the other, DeFazio proposed to split the lands down the middle, giving half to each trust. One would make money and give it to counties. The other would protect the non-market resources on its half the land. At least non-market resources receive some consideration, but the split between the two would be largely arbitrary, at least in the sense that there is no reason to think that half, however you divide it, is the “right” amount for each trust to get.

The House bill drops the non-market resources entirely. Moreover, instead of managing the lands at a profit, the trustees would be given revenue and resource targets that they are to meet no matter what the cost. Counties would get 75 percent of revenues, 20 percent would be used to manage the land, and the U.S. Treasury, which represents the taxpayers who theoretically own the land, would get a generous 5 percent.

The Antiplanner never liked the idea that counties should play a central role in any of these trusts. Historically, counties have received 25 percent of national forest revenues. But they only received 5 percent of BLM revenues except in western Oregon where they received 50 percent. These numbers were entirely arbitrary and little more than accidents of history. The federal lands do not impose very large costs on the counties, so there is no reason why they should get anywhere near as much as they do.

When national forest and BLM timber sales declined in the early 1990s, many counties, particularly in Oregon–which received about 40 percent of national forest receipts and 90 percent of BLM timber receipts–were up a creek. So Congress has passed several stop-gap measures giving counties a healthy percentage of their historic revenues even though the national forests and BLM lands aren’t producing those revenues anymore.
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Except for the fact that the counties pay lobbyists to bug Congress about this money, I don’t really see why counties deserve any of this money. Counties in some states receive less from the national forests than they would get if they could collect property taxes. In Oregon, they get many times more than property taxes. (An Oregon State University researcher once calculated exactly how much more. After he published his results, he was pointedly informed by his dean that “a lot of people have been murdered for a lot less money,” and that he should just shut up about it.)

Coos County, where the Antiplanner used to live, has one of the highest property tax rates in the state of Oregon, yet it says it would go broke if the federal timber money stopped coming in. I haven’t studied Coos County’s budget in detail, but I suspect it contains a lot of waste.

Giving counties 75 percent of receipts only compounds the problem, making them even more dependent on public lands than ever before. It also cheats Americans everywhere else: The lands are national forests, not county forests.

Worse is the idea that national forests would be given both timber volume and revenue targets that they would have a “fiduciary responsibility” to meet. The idea isn’t even fiscally conservative since it is highly likely that at least some national forests will end up spending more appropriated dollars than the dollars they give to the counties (a common occurrence before timber sales declined).

This is a timber bill, pure and simple, to which has been added the patina of the term “fiduciary trusts.” Never before has Congress been able to give public forest managers a timber target and make it stick. This seems to be a way to do it.

When the Antiplanner first proposed the idea of trusts, some environmentalists asked, “Aren’t you worried that this idea will be warped by the political process?” Not if environmentalists follow through on the idea and make sure it is done right, I answered.

Unfortunately, environmentalists have decided to retreat from any hard thinking about resource management. Instead of finding ways to make complicated systems work better, they are content to simply try to stop everything. That’s not going to work in the long run, meaning when the federal government becomes so desperate for money that it will do anything, including selling all federal lands to the highest bidder, to survive. Maybe there are still a few environmentalists out there who are willing to think about incentives rather than lawsuits. If so, I hope they speak up soon.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

5 Responses to Be Careful What You Wish For

  1. LazyReader says:

    Wow, money does grow on trees.

  2. jwetmore says:

    I’m not quite sure why the federal government shouldn’t sell some of its landholdings and other assets, even land that is supposed to be conservation land.

    I understand that both Ted Turner and John Malone – two notorious capitalists – each have tens of thousands of acres of conservation land. Turner, for example, is active in the group Trout Unlimited and has spent his own money restoring some Montana streams on his property to native trout species.

    Other groups that I contribute to, such as The Nature Conservancy, manage lands for conservation and other purposes. One of the good things about The Nature Conservancy is that its management goals are a lot less conflicted than the political goals for managing public land. They can truely act as fiduciaries for their members.

  3. Dan says:

    Again, we see the contrasts in privileging of ‘exchange value’ over ‘existence value’. Just because one prefers one way over another doesn’t mean it is good policy, especially when one considers time horizons.

    DS

  4. Sandy Teal says:

    It seems to me that the different privatization proposals mostly differ on which special interest groups they want to give away federal lands to. The Antiplanner’s proposal at least gives away federal assets to two different interest groups.

    I don’t have any problem with selling federal land, as long as it is just a reasonable amount at a time. Huge sales and give-aways to special interests are just a recipe for disaster. Even the Nature Conservancy ends up in scandal when their people have are tempted with huge secret private gains.

  5. gwtwbmwz3 says:

    The goal is to maintain continuance forested tracts that allow both fauna and flora to not only exist but to thrive. The thought of selling tracts of checkerboarded lands to private is a miasma waiting to happen. You think the gov has a tough time of managing land, wait till Joe Ego meets Portia Pennypincher. Joe is smarter than the rest and Portia wants to make a huge profit.
    Trust lands are not the way to go. There is new blood in the gov that wants to do things in a different way. Drop creating the wheel and work with the educated foresters who do love the land.

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