Should States Take Over the Federal Forests?

National forests managed by the USDA Forest Service have proven an increasingly divisive source of conflict. At times, debates over timber cutting and grazing have turned to violence as environmentalists square off against people whose jobs depend on the land.

In hearings on October 26 and November 2, Idaho Senator Larry Craig's Forests and Public Land Subcommittee asked the legitimate question, "Would the states be better forest managers than the federal government?" The answer could also influence Congressional action over the 450 million acres of federal lands managed by the Department of the Interior.

Most national forest controversies stem from Congress' regulation of national forest user fees. Forests produce timber, livestock forage, recreation, and fish & wildlife for hunters & anglers, all of which are sold at market rates on private lands. But various Congressional acts strongly discriminate between resource charges on national forests:

In short, the fee system strongly rewards managers for selling trees, modestly rewards them for grazing livestock, and negligibly rewards them for maintaining recreation and fish & wildlife habitat. Not surprisingly, many recreationists believe that the Forest Service is biased against them.

The fee system also cheats taxpayers since Congress spends tax dollars to arrange timber sales, manage range, and provide other national forest resources. Taxpayers get no return for their investments in recreation or other resources forests can't charge for, and they get negligible return for their investments in timber since forests can keep nearly all of the receipts. Overall, national forests cost taxpayers nearly $2 billion per year.

Congress rarely thinks of federal employees as people who can be influenced by rewards and budgets. In fact, user fees, budgets, and other rewards do far more to determine agency actions than laws that are usually open to interpretation.

To see whether states are more profitable land managers, I reviewed nearly 150 state forest, park, and fish & wildlife agencies. Only about 30 of the agencies earned a profit, and nearly 100 required huge subsidies from state taxpayers..

Close examination revealed that those agencies that were profitable almost invariably owed their profitability to federal, not state, requirements. For example, some states own land granted to them by the federal government, and such grants were accompanied by requirements that the lands be managed at a profit. States with no federal land grants most often manage their lands at a significant loss. And state legislatures have given no more thought than Congress to the rewards created by user fees and budgets.

Turning lands over to the states won't improve on-the-ground management--unless such transfers are accompanied by clearly written requirements for how the lands should be managed. But if Congress can write such requirements for the states, then it can write them for federal land managers as well, and avoid the controversy of turning the lands over to the states.

The first step is for Congress to allow public land managers to charge market value for all users and to let managers keep the same percentage share of all fees. Better yet, give managers the net income they earn each year to give them an incentive to reduce costs and to promote those uses whose values are greater than their costs.

The second step is to fund national forest and other public land management exclusively out of user fees, not out of tax dollars. This will eliminate the favoritism Congressional appropriators have shown to some users and geographic areas.

To protect those few resources that can't be managed through user fees, Congress should create trust funds seeded by a fixed percentage of all user fees. A biodiversity trust fund, for example, could promote endangered species by paying managers to use or avoid certain practices or by bidding on timber sales and then not cutting the trees.

Rather than transfer lands to the states, Congress should create individual land trusts to oversee each national forests. Anyone could join a forest land trust for a nominal annual fee. Members would select the board of trustees who would hire and fire the forest supervisor and approve the annual operating plan.

This proposal's checks and balances--a broad range of user fees, funding out of net income, trust funds for truly nonmarket resources, and forest trust boards--will greatly improve forest management and insure consideration for all forest values. As a bonus, taxpayers will save $2 billion per year. Congress should consider this idea when contemplating national forests and other public lands.

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