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Eugene Weekly : Viewpoint : 9.4.08




Timber Payment 

Conversation a dishonest one

by Ron Davis

My wife and I have lived in rural Oregon on our forest lands for more than 30 years. During this time we have thinned our forests twice, received revenue and paid taxes on the harvest and it looks better that when we started. As the “Secure Schools” money runs out and the Oregon timber counties begin their attempts to extract more tax money from income tax payers to make up “lost revenue,” it should be noted that much of the damage being done to our counties is being done with the full knowledge and consent of your elected representatives. The options put forth by industry and their enablers are either: Secure a welfare check from the treasury (secure schools), or we have to log vast swaths of public forest at a net loss to the American taxpayer to prop up our local governments.

The year that the “secure schools” money was approved by our nation’s lawmakers, your state delegation quietly phased out all harvest taxes for private industrial timberland owners having over 5000 acres in the state of Oregon. This action by your legislators sharply decreased the overall tax contribution of the logging industry, which already enjoyed preferred tax status. It reduced their payments to the state’s coffers by tens of millions of dollars each year.

The industry has been stripping their lands at a frenzied rate for the last several years to take advantage of this windfall. Last year they cut 3.5 billion board feet of timber off of the private lands in our state. At the same time they were closing mills and trying to increase the liquidation of the already over-cut public forests, and they have spiked their export volume. Last year alone they increased exports by 26 percent in Oregon and Washington. The money they get for the trees is often deposited offshore where it escapes taxes once again. In 2004 Congress provided an opportunity for them to repatriate this money at a tax rate of about 5 percent instead of the 35 percent written into the tax laws. Guess who makes up the difference?

Washington State taxes all timber cut from private lands with a 5 percent excise tax. While this is minimal, it provides a steady and significant flow of tax dollars to the state, which is then distributed to the counties. Why should the industry in Oregon get a free ride? They use our roads, destroy our natural environment, kill our fish and export our jobs and tax base; why should they not pay their way? 

Yet Governor Ted Kulongoski’s Timber Payments Taskforce never addresses the export giveaway or the jobs and taxes we are losing to Asian processors. There is no mention of the end of industrial harvest taxes. There is no mention of privilege taxes. There is no mention of excise taxes. Oregon’s tax structure is broken, and our elected officials are not dealing with it. Corporations used to pay close to 20 percent of Oregon’s income tax. Now they pay 4.6 percent, estimated to go to 4.4 percent by around 2010. A recent study indicates that tax breaks for the wealthiest Oregonians exceed the County’s lost timber payments. The commissioners from each of the timber dependent counties should be on the steps of the Capitol screaming for the legislature to fix it.

There is of course a national element. The federal government has a responsibility to provide payments to our region to offset the loss of property taxes we are losing each year because public lands are not taxed, and there are large swaths of National Forest and BLM managed lands in the affected counties. The problem is that even if we taxed the forests at the same rate we tax private timberland, it would make very little difference. For example, in Lane County during fiscal year 2006 the timber industry paid approximately $2 million in property taxes on a land base of around 600,000 acres. The public owns about 685,000 acres of land with the same overall productive capacity and would have provided about the same tax payment if it had been taxed on the same scale. Instead, the public lands provided over $60 million in timber receipts, payments in lieu of taxes and secure schools money. So the real deal is that the public antes up over $60 million while industry pays $2 million for the same productive land base.

It’s time to get the real figures on the table and hold our lawmakers and industry accountable for the terrible damage they are doing to our communities with their export, tax, environmental and fiscal policies. They take away your public services and shortchange your kids so a few industrial logging company owners can feast on the subsidized death of our public forests. It is time to get some fairness, ethics, integrity and honor into the tax equation. There are many solutions to our  current situation, not just the either/or mentioned earlier, and they are not giving us the information we need to choose wisely.  Public officials need to do their job and represent us and our future generations. With responsible harvesting and fair taxation, we can truly create a sustainable future.

Ron Davis is a rural Cottage Grove resident, medical laboratory scientist, former teacher and original board member of EPUD. He ran against Faye Stewart for county commissioner in 2006.