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Loss Leaders

Taxpayer group slams federal timber sales for record losses

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Whether the Forest Service allows logging on fire-blackened forests or green ones, the vast majority of it is happening in the red.

Or so says the Washington, D.C.-based watchdog group, Taxpayers for Common Sense (TCS), who issued a report last week asserting that the Forest Service’s federal timber program lost $407 million in fiscal year 1998, the program’s worst financial year on record.

According to the report, entitled “In the Red: National Forest Logging Continues to Lose Millions,” 105 of the nation’s 111 national forests spent more money in 1998 than they earned from their timber sales. At a time when logging levels on the national forests have dropped to an all-time low, these latest figures reflect a 23 percent jump in losses over the last decade. Based on data from the General Accounting Office (GAO), the federal timber program lost an average of $330 million annually between 1992 and 1997.

The biggest money-losers, TCS asserts, were national forests in Montana, Idaho, Oregon, Washington, California and Alaska. Oregon topped the list, losing more than $100 million in 1998, the last year for which the Forest Service has data available.

“We’re not against all logging. We’re not for all logging. We just think that taxpayers ought to be getting a better deal out of it,” says Jonathan Oppenheimer, director of the forest campaign for TCS.

TCS has been publicizing losses in the federal timber program each year since 1995, relying on data and budget analyses performed by the GAO. This year, however, TCS decided to crunch the numbers themselves, in part, says Oppenheimer, because they were fed up with the Forest Service’s long delay in releasing that data. To wit: Figures for fiscal year 1998 took the Forest Service 32 months—and numerous Freedom of Information Act requests—to release.

In fact, TCS cites the findings of one report by the Congressional Budget Office, which found that if money-losing timber programs were eliminated, taxpayers would save an estimated $1.6 million over the next decade.

Among the forests in the top 10 for timber sale losses was the 2.2 million-acre Kootenai National Forest in northwest Montana, which ranked seventh nationally and reportedly lost $9.7 million in 1998. But Tom Maffei, timber management officer for the Kootenai National Forest, says those figures just don’t add up.

“Whatever this group is doing, obviously they’re manipulating the numbers,” says Maffei. According to his data, the Kootenai National Forest timber program showed a net profit of $668,042 for fiscal year 1998. Maffei bases that assertion on the Timber Sale Program Information Reporting System, which he says is the accounting method that was mandated by Congress and the GAO.

Maffei admits that other priorities of the Forest Service timber program, such as fire-prevention, forest thinning, restoration and wildlife conservation, have contributed to making timber sales less profitable than they might be otherwise.

“There was time, obviously, when the Forest Service was making a lot more money on its timber sale program,” says Maffei. “But we were probably focused a lot more on just producing timber.”

Moreover, downturns in national lumber prices have hit the softwood markets of the Mountain West much harder than their eastern counterparts.

“Folks like to compare us to a corporation and say, ‘If this were any normal timber corporation, obviously they’d be out of business because they’re losing money hand over fist,’” says Maffei. “What you need to realize is that the Forest Service is not mandated by Congress to make a profit on the sale of timber.”

Maffei says that particularly over the last five years, administering timber sales has become more costly and time-consuming, especially the environmental analyses, which he says have become “almost a gargantuan undertaking,” and eat up roughly 60 percent of his timber sales budget. Other apparent losses, like those reported by many national forests in 1997, are simply due to a new system of accounting.

But Oppenheimer, who has been vocal critic of the Forest Service for its failure to reform its wildfire management program, says such excuses don’t pass muster. First, he says that in order to maintain consistency with GAO reports in past years, TCS used the same methodologies and data sources as the GAO for analyzing the 1998 timber sales.

Moreover, he says that the Forest Service does not accurately account for all the overhead costs associated with timber sales, such as road-building, maintenance and other administration.

While this year’s congressional debates over Interior Department appropriations will likely focus more on the federal roadless plan than on timber sales—the Bush plan increases the federal timber sale budget by more than $11 million—Oppenheimer says his group will continue to disclose annual waste in the federal timber program.

“There has been some indication that the Forest Service might not even release these economic figures in the future,” says Oppenheimer. “That would set a terrible precedent, that you can waste taxpayer dollars and subsidize a program and not even be responsible for reporting back to Congress and the public.”

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