[Senate Hearing 115-130]
[From the U.S. Government Publishing Office]
S. Hrg. 115-130
FEDERAL PAYMENTS TO LOCAL GOVERNMENTS PROVIDED THROUGH THE SECURE RURAL
SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT AND THE PAYMENT IN LIEU OF
TAXES PROGRAMS AND THE NEED TO PROVIDE GREATER FISCAL CERTAINTY FOR
RESOURCE-DEPENDENT COMMUNITIES WITH TAX-EXEMPT FEDERAL LANDS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
MAY 2, 2017
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
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Available via the World Wide Web: http://www.fdsys.gov
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming MARIA CANTWELL, Washington
JAMES E. RISCH, Idaho RON WYDEN, Oregon
MIKE LEE, Utah BERNARD SANDERS, Vermont
JEFF FLAKE, Arizona DEBBIE STABENOW, Michigan
STEVE DAINES, Montana AL FRANKEN, Minnesota
CORY GARDNER, Colorado JOE MANCHIN III, West Virginia
LAMAR ALEXANDER, Tennessee MARTIN HEINRICH, New Mexico
JOHN HOEVEN, North Dakota MAZIE K. HIRONO, Hawaii
BILL CASSIDY, Louisiana ANGUS S. KING, JR., Maine
ROB PORTMAN, Ohio TAMMY DUCKWORTH, Illinois
LUTHER STRANGE, Alabama CATHERINE CORTEZ MASTO, Nevada
Colin Hayes, Staff Director
Patrick J. McCormick III, Chief Counsel
Lucy Murfitt, Senior Counsel and Public Lands & Natural Resources
Policy Director
Michelle Lane, Professional Staff Member
Angela Becker-Dippmann, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
Bryan Petit, Democratic Senior Professional Staff Member
C O N T E N T S
----------
OPENING STATEMENTS
Page
Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska.... 1
Cantwell, Hon. Maria, Ranking Member and a U.S. Senator from
Washington..................................................... 6
WITNESSES
Ferriter, Olivia Barton, Deputy Assistant Secretary for Budget,
Finance, Performance and Acquisition, U.S. Department of the
Interior....................................................... 9
Casamassa, Glenn, Associate Deputy Chief, National Forest System,
U.S. Department of Agriculture................................. 14
Landis, Hon. David, Mayor, Ketchikan Gateway Borough, Alaska..... 21
Cruickshank, Hon. Gordon, Commissioner, Valley County, Idaho..... 26
Manus, Hon. Mike, Commissioner, Pend Oreille County, Washington.. 34
Haggerty, Mark, Headwaters Economics............................. 50
Whitney, Hon. Mark, Commissioner, Beaver County, Utah, and
President, Utah Association of Counties on behalf of the
National Association of Counties............................... 111
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Apache County (Arizona) Board of Supervisors:
Letter for the Record........................................ 489
Casamassa, Glenn:
Opening Statement............................................ 14
Written Testimony............................................ 16
Responses to Questions for the Record........................ 146
Cantwell, Hon. Maria:
Opening Statement............................................ 6
Cochise County (Arizona) Board of Supervisors:
Letter for the Record........................................ 491
County Supervisors Association of Arizona:
Letter for the Record........................................ 493
Craig City (Alaska) School District:
Letter for the Record........................................ 494
Cruickshank, Hon. Gordon:
Opening Statement............................................ 26
Written Testimony............................................ 28
Responses to Questions for the Record........................ 465
Ferriter, Olivia Barton:
Opening Statement............................................ 9
Written Testimony............................................ 11
Responses to Questions for the Record........................ 145
Gila County (Arizona) Board of Supervisors:
Letter for the Record........................................ 496
Haggerty, Mark:
Opening Statement............................................ 50
Written Testimony............................................ 52
Responses to Questions for the Record........................ 473
Heller, Hon. Dean:
Statement for the Record..................................... 4
Jefferson County (Washington) Board of County Commissioners:
Letter for the Record........................................ 498
Johnson, Hon. Buster:
Letter for the Record........................................ 503
Landis, Hon. David:
Opening Statement............................................ 21
Written Testimony............................................ 23
Manus, Hon. Mike:
Opening Statement............................................ 34
Written Testimony............................................ 36
Responses to Questions for the Record........................ 470
Miller, Hon. Stephen:
Letter for the Record........................................ 504
Mohave County (Arizona) Board of Supervisors--District 1:
Letter for the Record........................................ 505
Murkowski, Hon. Lisa:
Opening Statement............................................ 1
National Association of Counties:
Letter for the Record........................................ 507
National Education Association:
Letter for the Record........................................ 509
National Governors Association:
Press Release dated 4/26/2017 entitled ``Governors to
Congress: Restore Rural Funding in Continuing Resolution''. 510
Navajo County (Arizona) Board of Supervisors:
Letter for the Record........................................ 512
Petersburg Borough, Alaska:
Statement for the Record..................................... 513
Sanders, Hon. Bernard:
Statement for the Record..................................... 515
SERRC:
Board of Directors Resolution No.: 2017-01 for the Record.... 516
Smith, Hon. Jack:
Letter for the Record........................................ 517
Stevenson-Carson School District (Washington):
Letter for the Record........................................ 518
Sustainable Forest Action Coalition:
Letter for the Record........................................ 520
Western Governors' Association:
Policy Resolution 2017-03: Tax-Exempt Federal Lands and
Secure Rural Schools for the Record........................ 522
Letter for the Record........................................ 525
Whitney, Hon. Mark:
Opening Statement............................................ 111
Written Testimony............................................ 113
Responses to Questions for the Record........................ 487
Yavapai County (Arizona) Board of Supervisors:
Letter for the Record........................................ 527
Yuma County (Arizona) Board of Supervisors:
Letter for the Record........................................ 528
FEDERAL PAYMENTS TO LOCAL GOVERNMENTS PROVIDED THROUGH THE SECURE RURAL
SCHOOLS AND COMMUNITY SELF-DETERMINATION ACT AND THE PAYMENT IN LIEU OF
TAXES PROGRAMS AND THE NEED TO PROVIDE GREATER FISCAL CERTAINTY FOR
RESOURCE-DEPENDENT COMMUNITIES WITH TAX-EXEMPT FEDERAL LANDS
----------
TUESDAY, MAY 2, 2017
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:05 a.m. in
Room SD-366, Dirksen Senate Office Building, Hon. Lisa
Murkowski, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM
ALASKA
The Chairman. Good morning, everyone. The Committee will
come to order.
We are here today to examine two important, federal payment
programs, Secure Rural Schools and Payment in Lieu of Taxes,
affectionately known as SRS and PILT.
From a broader perspective, we are also here to consider
what Congress can do to provide greater fiscal certainty in
resource dependent communities with tax exempt federal lands.
This is an issue that hits home for many of us, certainly my
colleagues from Oregon, Washington, and Idaho. I think you see
the interest reflected here on the Committee.
In Alaska, the Forest Service controls approximately 22
million acres of land, including 17 million acres in the
Southeastern region which is the area that Mayor Landis, from
the Ketchikan Gateway Borough, represents. There is not a lot
of private land in that region, and I talk about that a lot.
There is about 190,000 acres. So think about that. You have
190,000 acres of private land, a fraction of what is within the
borough. Again, you have 17 million acres of land that the
Forest Service controls there in Southeast. It makes it pretty
tough to find where a tax base is.
Alaska is a resource dependent state. Our communities rely
on the Federal Government to be a good neighbor and partner to
support jobs and economic opportunity on federal lands.
In the Tongass, that relationship used to be largely
focused on timber production. It created good paying jobs to
support families, and it generated income that could be shared
with communities to provide essential services such as schools.
Yet today we are barely cutting any trees in our Nation's
largest national forest, just three million board feet last
year. Our remaining mills are hanging on by a thread, and so
are so many of the people who work at them.
When the Federal Government fails to be that good neighbor,
fails to be that partner, and we are not allowed to develop our
resources, our rural communities suffer. We lose jobs, we lose
revenues, and we become more and more dependent on federal
programs like SRS and PILT to make up the difference.
For example, Petersburg City School District in Petersburg,
which is a small community in Southeast Alaska. They received
about $550,000 last year from Secure Rural Schools, equal to
nearly one-third of the Borough's contribution to its $8.3
million budget. According to the Superintendent, the loss of
these funds puts libraries, counselors, music and art programs,
and all of the extracurricular programs at risk.
Further north in the South Central area in the Chugach
School District, SRS funding represented 3.9 percent of the
annual budget for the 2016 school year, but six percent as a
percentage of teaching staff.
The bottom line is that this really translates directly to
teaching jobs in many of the schools in my state.
And Alaska's story is not unique. Boroughs, counties, and
parishes around the country with large swaths of federal lands
face real challenges to developing sustainable economies. Many
communities that were once reliant on timber production have
seen little income behind the mills that shuttered. Reducing
timber production has not been particularly good for the health
of our forests either. It has created a wildfire problem of
epic proportions across much of the West, with over 40 percent
of the National Forest System in need of some kind of hazardous
fuel reduction treatment.
I am not going to suggest this morning that we turn back
the clock, that we are going to see the days when I was a young
person in Southeast and the timber industry was really booming.
But I think we recognize we cannot have the status quo
continue. Instead, I think that Congress must act, for the
health of our forests and for the survival of our rural
communities.
First, we have to work together in the short-term to
continue both the SRS and PILT programs. The testimony that we
will hear this morning will demonstrate why that is critical,
but I think we also need to find a better way in the long-term.
We need to pick up where we left off with respect to
wildfire and forest management reform that Senator Cantwell and
I were working on. In the last Congress, this Committee did
some pretty good work in this area. We wrote the type of policy
that will help provide the jobs and economic activity our rural
and our forested communities so desperately need.
We also need to do more to gain access to our federal lands
for sustainable economic development. This should include
opportunities for states and counties to partner with the
Federal Government to manage those lands. We have seen a lot of
doors close over the years, but hopefully in a new
Administration, it is time to start opening some of these back
up again.
Finally, if we are going to retain federal lands in federal
ownership, we need to be creative in thinking about and funding
payments for tax-exempt lands. That includes taking a good,
hard look at ideas like a permanent Natural Resources Trust and
other options for revenue sharing, because the annual scramble
that goes on around here to find funding does not provide the
certainty or the stability that our rural communities need to
provide services to their people.
I know that every member of this Committee is visited by
people who come around once a year, truly pleading with us, to
give them some certainly with regards to their SRS and PILT
funding. I feel for those rural communities. I see the effects
of federal failures every time I am traveling in Southeast. I
also look at the policies, and I know we can do better.
That is why we are here this morning, why I am looking
forward to hearing from our witnesses about what we need to do
to make our federal lands work better for our communities and
why today is not just another oversight hearing but hopefully
the start of a longer-term effort to do better by the people
who live in rural America.
Senator Heller has asked me to submit a statement in
support of the PILT program for the record, which I will do
now, unless there are any objections. So we will include that.
[The information referred to follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. I will now turn to Senator Cantwell for her
comments this morning.
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Madam Chair, and thank you for
holding this important hearing.
I also want to thank all of the Washingtonians that are in
the audience, but especially our witness, Commissioner Manus,
from Pend Oreille County. Thank you so much for being here.
And obviously, my colleague from Oregon, who has been a
stalwart on this issue.
The task before us is difficult. For us to extend the
Secure Rural Schools programs, the House, the Senate and the
White House all must, ultimately, support the extension.
Unfortunately, some of our colleagues in the House do not
understand the importance of Secure Rural Schools program, and
the President's budget did not seem to understand the
importance of this. We are going to have to work harder.
That is why I am joining my colleagues, Senator Wyden and
Senator Hatch, tomorrow in introducing a bill to reauthorize
the now expired Secure Rural Schools program.
Look at the amount of federal land in the West compared
with the East. There is a large amount of federal land in the
West. We are more impacted by Secure Rural Schools and PILT
than counties in the East.
By example, Speaker Ryan, I think has something like 14
acres of federal land that is in his Congressional District.
Okanogan County in the State of Washington contains 1.6 million
acres. Therein lies the huge disconnect.
President Trump also seems to not understand that we need
the SRS and PILT programs, that the impact that they have on
local governments and communities across the West is so
important to address. These two programs are what pays for
schools, roads and emergency services in our rural communities.
So I can't imagine why the budget blueprint that he
released basically would cut PILT payments by $76 million, 17
percent. And unlike every one of the eight budget proposals
that President Obama submitted, the Trump budget contained no
proposal to extend the SRS program.
Local governments depend on these programs to function, and
we need to have these programs now and give certainty to our
local governments.
Through PILT alone, the counties in Washington receive over
$20 million, and I want them to receive at least that much
again this year. Counties have already suffered this year from
the ceasing of the payments under the Secure Rural Schools
program. In 2016, under SRS, Forest Service payments to
Washington counties totaled $17 million. This year, now that
SRS is not in place, the Forest Service payment to those
communities totaled just $2 million.
Commissioner Manus, from Pend Oreille, will talk about how
that reduction in funding has forced Pend Oreille County to
give back almost $3 million in grants for the county road
system because they could no longer provide the required 10
percent match. So thank you for traveling here to tell those
stories.
You can see that we are completely out of room at the
witness table, and that is because every one of these
communities has a similar story.
Many communities in Washington, like in Okanogan or Chelan
County, Whatcom County, and Skamania County, are all impacted
by this.
Karen Douglas is also here today from Stevenson,
Washington, which I just visited recently. Her job is the
Superintendent of the Stevenson Carson School District that is
in Skamania County. Now, bear in mind, Skamania County is 80
percent federal land, and almost all of the rest of the county
is owned by the state or a couple of timber mills. So only two
percent of Skamania County can be developed or is taxable.
When 80 percent of your land is federal and only two
percent is taxable, the government has to chip in for the
community services and has to fund the local government
agencies that we have come to expect, whether that's 911 or
ambulance services, police for visitors to our national forest,
support for the federal employees who work in our national
forest and their families, or roads for people to come and move
around these wonderful lands.
A previous Commissioner from Skamania testified at our last
hearing on Secure Rural Schools, but I think it is worth
repeating some of Skamania County's story.
In Skamania County, Secure Rural Schools payments
represented more than 15 percent of their county budget. These
payments pay the salaries of more than half of the 65 employees
for the county. I can't imagine having your annual budget and
not knowing whether you are going to have funding to continue
to have the workforce in your community.
Karen's budget, in particular, has dropped more than 30
percent in the last six years because of our reduction in
county payments. With the discontinuation of Secure Rural
Schools this year, her budget dropped another 12 percent. Last
week the community failed to pass a levy to make up the
shortfall, so Karen had to begin laying off more employees. The
middle school has already been eliminated. The school for those
with alternative learning needs has been closed. And now, all
sports programs, art classes, extracurricular activities and
counselors have been completely eliminated.
So yes, I just have to say the President has not supported
this and our House colleagues, who do not understand it, have
not supported SRS. They have to understand how our Western
states are impacted by this.
I believe that providing a base level of funding for our
counties and schools and encouraging forest jobs and forest
management are both things that we need to do. Obviously these
things link between the two historically, but I think holding
one hostage for the other is not the right idea. What we need
to do is give these counties the tools that they need to
continue to support the resources that we want, if we want
people to live in these communities.
So I look forward to working with my colleagues on this.
Again, I thank all the witnesses for being here today, and I
thank my colleague from Oregon for his leadership in helping us
find sources of revenue on this and being such a champion.
I look forward to hearing the testimony and getting some
solutions for this issue as soon as possible so our communities
can continue to make plans for their future.
Thank you, Madam Chair.
The Chairman. Thank you, Senator Cantwell.
I appreciate how your statement has laid out the real life
impact for families and for communities. I think we see this,
and we feel it in the West. As I look around our Committee
here, I wish we had more of our colleagues who are not from the
West, who perhaps do not understand the significant impact.
I, too, want to give a further shout out to your efforts,
Senator Wyden. You have been aggressive, diligent and dogged on
this for years. I look forward to also supporting the efforts
that you are making with Senator Hatch and Senator Cantwell in
the Finance Committee. I have been told by Senator Hatch that
he is committed to making sure that we have got that offset
coming out of the Finance Committee, but I look forward to
really trying to take some of the stress out of this on an
annual basis for these communities and these families. So just
thank you for that.
I would like to turn to our witnesses. As Senator Cantwell
has acknowledged, we have a very full panel. We could have
filled up the room with the people who wanted to speak here.
We are joined this morning by Olivia Barton Ferriter?
Ms. Ferriter. Ferriter.
The Chairman. Ferriter, who is the Deputy Assistant
Secretary for Budget, Finance, Performance and Acquisition at
the U.S. Department of the Interior.
Mr. Glenn Casamassa, who is the Associate Deputy Chief for
the U.S. Forest Service at the U.S. Department of Agriculture.
Thank you for being here.
I mentioned Mayor David Landis, who is the Mayor of the
Ketchikan Gateway Borough. Thank you for traveling a long way
to be here this morning and providing your testimony.
I have heard great things from my colleague, Senator Risch,
about our next panelist, the Honorable Gordon Cruickshank, who
is the Commissioner of Valley County, Idaho. Thank you for
joining us this morning.
The Honorable Mike Manus, who Senator Cantwell has noted,
is a County Commissioner at Pend Oreille County in Washington
State.
Mr. Mark Haggerty, who is with Headwaters Economics.
The panel will be rounded out from a fellow Utahan from
Senator Lee's state, the Honorable Mark Whitney, who is
President of Utah's Association of Counties, on behalf of the
National Association of Counties.
It is a distinguished panel.
Senator Risch.
Senator Risch. Senator Cantwell, did you want to tell her
about Pend Oreille or did you want me to?
Senator Cantwell. Thank you. I think you just did.
[Laughter.]
Senator Risch. No offense.
The Chairman. Pend Oreille?
Senator Risch. Yes, well, that is the American version.
The Chairman. Alright, thank you.
[Laughter.]
Pend Oreille, I stand corrected, proudly.
Senator Risch. It is like people calling Boise, Boyzee.
There is no z in Boise.
The Chairman. We will be the Committee of correct
pronunciation.
[Laughter.]
Senator Cantwell. Yes, well, I am sure you can lay some
Alaska terms on us, and we will have a lot of trouble.
[Laughter.]
The Chairman. I think the Hawaiians tripped us up once,
Senator Wyden, if you will recall that one.
Let's begin the panel with Ms. Ferriter. I would ask that
you try to keep your comments to five minutes. Your full
statements will be included as part of the record.
Please proceed.
STATEMENT OF OLIVIA BARTON FERRITER, DEPUTY ASSISTANT SECRETARY
FOR BUDGET, FINANCE, PERFORMANCE AND ACQUISITION, U.S.
DEPARTMENT OF THE INTERIOR
Ms. Ferriter. Good morning, Chairman Murkowski, Ranking
Member Cantwell, and members of the Committee. Thank you for
inviting me here today on behalf of the Department of the
Interior.
The Payment In Lieu of Taxes program represents an
important way in which the Federal Government can be a good
neighbor to local communities. As you know, the PILT program
makes payments to local governments to help compensate for
their loss of property taxes due to having non-taxable, federal
lands within their boundaries. Counties have the flexibility to
use PILT payments for any governmental purpose depending on the
laws of the individual states. The funds are often used to pay
for essential services, such as firefighting, police
protection, public schools, roads and search and rescue
operations. And I have to say, having these services adjacent
to our lands, our parks, our refuges, our public lands, is also
very helpful for the Department.
The Department of the Interior has distributed more than
$7.5 billion in PILT payments to counties since the program
began in 1977.
In 2016, PILT payments of $452 million went to more than
1,900 counties throughout the Nation. We use a formula provided
in law that's based on acreage, population and prior year
revenue payments. The acreage amounts and population rates are
adjusted each year for inflation.
In formulating the payment, we coordinate across Interior's
Bureaus with the Forest Service and other federal agencies to
ensure we have the accurate acreage data on which to base the
payment. We also seek input from the states on the amounts of
prior year revenue payments and those that are retained by the
counties.
We are audited annually on this data. We keep the counties
informed of changes, and we post information about the payments
publicly to ensure transparency.
From Fiscal Year 2008 to Fiscal Year 2012, the full funding
for the PILT program was provided under a mandatory
authorization. After that, full funding was provided through
one year extensions in FY2013 and FY2014. In FY2015, the
program received a combination of mandatory and discretionary
approps. And in 2016, discretionary funding was appropriated
for the program.
Now in FY2017, Congress is again appropriating
discretionary funding for the PILT program. The Department
currently is preparing the necessary calculations to issue
payments for the FY2017 PILT program to the counties by June
30th.
This concludes my oral statement. You have my full
statement for the record, and I'll be happy to answer any
questions.
Thank you.
[The prepared statement of Ms. Ferriter follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you so very much.
Mr. Casamassa.
STATEMENT OF GLENN CASAMASSA, ASSOCIATE DEPUTY CHIEF, NATIONAL
FOREST SYSTEM, U.S. DEPARTMENT OF AGRICULTURE
Mr. Casamassa. Chair Murkowski, Ranking Member Cantwell,
members of the Committee, thank you for inviting me to speak
with you this morning regarding the Forest Service
Administration of the Secure Rural Schools and Community Self-
Determination Act, otherwise known as the Secure Rural Schools
program.
For more than 15 years the program has led to substantial
investments in our rural communities and offered a forum for
the public to participate collaboratively in the selection of
projects on national forests while supporting local economies.
The Forest Service has a long history of administering programs
to compensate communities in or near our national forests.
Soon after the foundation of the modern Forest Service and
the National Forest System, Congress enacted the 1908 Act, or
what is commonly known as the 25 Percent Act, to compensate
local governments for the tax-exempt status of the national
forests. In the late 1980's a decline in receipts, particularly
a significant drop in timber sales in Western states, led to
reduced payments.
Payments to states fluctuated from year to year. The
unpredictable--unpredictability of payments created hardships
and uncertainty for local governments who were trying to budget
for schools and other essential services in the community. The
decline in timber sales and corresponding reductions in the 25
percent payment was particularly acute in Northern California,
Oregon and Washington.
To address this concern, Congress provided safety net
payments to counties in the states from 1994 to 2003. The
safety net payments were enhanced payments structured to
decline annually and intended to help the counties transition
to the reduced 25 percent.
Nearing the end of the program Congress opted to create a
new program, Secure Rural Schools, in 2000 and expanded beyond
Northern California and the Pacific Northwest. Under Secure
Rural Schools a county could elect to continue to receive its
share of the state's 25 percent payments or choose to receive a
share of the state's full payment amount which was a stabilized
amount that would decline over time. It was not based on annual
receipts.
From 2005 through 2016, the Forest Service distributed
$3.78 billion under Title I of Secure Rural Schools.
Secure Rural Schools also allowed for the local citizens to
advise the Forest Service through participation in Resource
Advisory Committees on the development of projects of mutual
interest that would benefit the local economy and improve the
health of our forests.
From 2005 through 2016 approximately $412 million was
allocated for projects that maintained existing infrastructure
and enhanced the health of forest ecosystems, known as Title
II.
Finally, SRS supplied funding for essential public services
beyond schools and public roads. Since 2008, counties could
elect to use a portion of that funding to support activities
under the Firewise Community program, request reimbursement for
emergency services on national forests or prepare a community
wildlife--wildfire protection plan.
From 2005 through 2016, over $270 million was allocated to
the type of activities under Title III of SRS. Congress has
reauthorized SRS multiple times over the last 15 years with the
last reauthorization occurring in 2015 for two years. In 2016,
the Forest Service made a final distribution of approximately
$270 million in funding to 41 states and the Commonwealth of
Puerto Rico.
With that reauthorization of Secure Rural Schools, the
Forest Service reverted to distributing payments for the 2017
payment under the 1908 Act. The payments distributed to the
states in March totaled $54 million. This is roughly 80 percent
less than the prior year's payments under the Secure Rural
Schools program.
For over a decade the Secure Rural Schools program has
successfully supported communities and allowed for the
development of important, collaborative, working relations
between the Forest Service and members of the communities. We
recognize the availability of these payments has a profound and
significant effect on the budgets of local governments and
their ability to provide services to the public.
We also understand the importance of continuing to
collaborate with the members of communities on important
natural resource issues. As such, the Forest Service remains
committed to working with the Committee and our partners to
collectively advance a cohesive strategy that will support
opportunities to work with and invest in communities around
their national forests.
Thank you again for the opportunity to testify. I'm happy
to answer any questions you may have.
[The prepared statement of Mr. Casamassa follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Mr. Casamassa.
Mayor Landis, welcome.
STATEMENT OF HON. DAVID LANDIS, MAYOR, KETCHIKAN GATEWAY
BOROUGH, ALASKA
Mr. Landis. Thank you for that welcome and good morning,
Chairman Murkowski, Ranking Member Cantwell and members of the
Committee.
For the record, my name is David Landis, Mayor of the
Ketchikan Gateway Borough in Alaska.
Let me tell you a little bit about the place where the
Chairman was born and where I spent most of the last 45 years.
The Borough was formed 54 years ago. Our population center of
about 14,000 citizens live on an island with no road
connections to anywhere. Our land area is very large and
difficult to reach.
The Borough has a broad range of responsibilities. You've
seen these in my written testimony. Some of them, though, are
public education, transportation, land use planning, fire
protection and EMS and many other functions.
So, nationwide nearly 28 percent of the land in the United
States is owned by the Federal Government. In our Borough,
however, it is 96.7 percent. And I know the Chairman has
mentioned this to this Committee several times in the past, but
I'm going to repeat it again--96.7 percent of all lands within
the Ketchikan Gateway Borough are owned by the Federal
Government. All told, the federal land within our boundaries is
larger than the entire state of Connecticut.
That's not all. In addition to this extensive federal
ownership, almost three percent of the Borough's land is owned
by other tax exempt organizations. This means that over 99.5
percent of the land in the Borough is categorically exempted
from property taxes, leaving less than one half of one percent
of the land subject to taxation. That's why some have called us
the poster child for these issues.
I'm sure it's obvious that these circumstances create major
challenges in terms of developing and maintaining an economy
and funding local public services.
Let me go back in history a little bit for about 90 years,
beginning with the creation of the Tongass National Forest in
1907. Residents of Ketchikan have been blessed with the ability
to utilize, in responsible and sustainable ways, the abundant
natural resources surrounding us, primarily the forest. That
ended in the 1990's with shifts in federal land-use policies
which were forced upon us and prevented us from utilizing
nearly all of the lands in our region.
As a result, Chairman Murkowski, the economic foundation
upon which the Borough was built on has disintegrated.
Fortunately the Federal Government provided SRS payments and
PILT payments to provide modest, but very important, measures
of compensation for the tax-exempt status of over three million
acres of land within the Borough; however, these critical
federal support programs have eroded considerably, more than 30
percent in the past eight years alone. We understand that these
two programs face real threats to further reductions. And
again, that's not all.
The tremendous difficulties in funding local services with
this lopsided land ownership structure is compounded by the
fact that the State of Alaska is presently experiencing the
greatest fiscal challenges in its history due to low oil prices
and the effects on state revenue. While our state officials
have struggled to solve Alaska's fiscal crisis, we've seen ever
higher costs being pushed onto boroughs and cities by the State
of Alaska, making our financial struggles worse yet.
The citizens of the Borough support solutions, though.
These may include a revitalization of the timber industry
through creation of a state forest, such as what our
representative has proposed, or a multi-year funding stream for
SRS and PILT programs or others that the Committee may be aware
of. In our view, Congress cannot continue to stop reasonable
and responsible use of federal lands while reducing the funding
designated to offset the tax-exempt status of those lands.
Given the circumstances that I've outlined here today, the
SRS program which has existed in some form for more than a
century and PILT which has existed for four decades are truly
vital to maintaining essential public services in the Ketchikan
Gateway Borough.
These programs recognize that the inability of local
governments to collect property taxes on federally-owned lands
has a significant financial impact on municipal governments
such as ours. So I implore you to recognize that these programs
have stood the test of time and are more critical now than
ever.
Chairman, thank you for the opportunity to testify before
the Committee this morning. If you have any questions, I would
be happy to answer them and follow up with any questions for
the record.
Thank you.
[The prepared statement of Mr. Landis follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Mayor, we appreciate you being here and your
testimony this morning.
Commissioner Cruickshank, welcome.
STATEMENT OF HON. GORDON CRUICKSHANK, COMMISSIONER, VALLEY
COUNTY, IDAHO
Mr. Cruickshank. Chairman Murkowski, Ranking Member
Cantwell and distinguished members of the Committee, thank you
for holding today's hearing examining federal payments to
public land counties and for inviting me to tell my home
county's story.
My name is Gordon Cruickshank and I'm a lifelong resident
and County Commissioner in Valley County, Idaho. Previously I
worked for the Valley County road department. We have a
population of nearly 10,000 residents. Valley County totals
nearly 2.4 million acres and is 88 percent federally
administered.
Since the advent of our federal land system, Congress has
worked to provide revenue sources so counties can carry their
governing missions forward, and most notably, through the
Payment in Lieu of Taxes and Secure Rural Schools programs.
Counties appreciate the full PILT funding included in the
Fiscal Year 2017 Omnibus bill. We ask for reauthorization of
SRS to ensure federal public land counties receive the funding
they need.
Under PILT, the Federal Government provides a payment to
counties with significant federal lands to make up for lost
property tax revenue. Valley County received nearly $750,000
from PILT last year. Valley County uses PILT funding to support
law enforcement on Forest Service lands, wages for county
employees and other county departmental operations. We are
pleased to see full PILT funding in the Fiscal Year 2017
Omnibus bill.
Counties are eager to partner with congressional leaders on
a long-term funding solution for PILT. After federal timber
production dropped in the 1990's, communities like mine faced
constant budget shortfalls forcing us to reduce public
services.
In response, Congress established the Secure Rural Schools
program to provide payments to counties impacted by decreased
timber production. Today, over nine million schoolchildren rely
on SRS to keep teachers in their classrooms and counties need
SRS funds to meet their governing missions.
In 2015, Valley County received $1.8 million from SRS. SRS
was designed to temporarily support counties and schools until
timber production increased and sustainable revenue was again
produced. Unfortunately, the consistent decline in timber
harvest continues.
America's counties support reauthorizing SRS to serve as a
bridge to a future where timber receipts will provide them a
stable revenue stream. Without SRS reauthorization, Valley
County will receive a mere $114,000 in the 1908 Act payments
this year, a 94 percent cut.
This year our county attempted to purchase crushed rock for
road construction. We initially budgeted $300,000 but found it
would cost almost $800,000. Previously, SRS funds would have
allowed us to proceed, but today we do not have the extra
money.
Furthermore, if Congress does not reauthorize SRS, the PILT
calculation changes. SRS funds would not be deducted from the
PILT formula forcing PILT alone to cover more federal acreage,
leading to dramatically reduced payments. While Valley County's
PILT payment would have increased by $235,000 without the 2015
reauthorization, we would still need to find $1.5 million to
make up a difference from SRS expiring, a near impossible task
with such a small base.
Years ago, Central Idaho had four major sawmills and one
small sawmill. Today, only one sawmill remains open. This
caused Central Idaho many good paying jobs, but also
contributed to the declining health of our forests and the
catastrophic fires we see too often throughout the West. These
fires make it impossible for land management agencies to meet
their core missions due to fire borrowing, the practice of
pulling money from ongoing projects to fight wildfires.
In 2015, $700 million was pulled from forest management for
firefighting. Congress must act to permanently solve fire
borrowing.
Counties have proven they are a willing, innovative partner
to change the way our national forests are managed. Idaho
counties developed a pilot project, known as the Community
Forest Trust. The goal, ultimately, is to designate specific
federal forest lands within Idaho as a Community Forest Trust
that would be managed in trust for local counties. The Idaho
Department of Lands would manage the forest lands while the
Federal Government retained ownership. Legislation to establish
the Community Forest Trust pilot project passed the U.S. House
of Representatives in 2013. We can work together on
environmentally sound forest management solutions to reduce the
threat of wildfire and produce new revenues for counties.
Chairman Murkowski, Ranking Member Cantwell, thank you for
inviting me to testify. We are happy to partner with the
Committee on legislation to continue full funding of PILT, to
reauthorize the Secure Rural Schools program until our national
forests become productive.
We hope the Committee works to address both fire borrowing
and forest management practices in the 115th Congress as well.
With the decline in timber harvests, reduction of SRS payments
and the ever growing threat of catastrophic wildfire, something
must be done to protect counties. We stand ready to assist.
Thank you.
[The prepared statement of Mr. Cruickshank follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Mr. Cruickshank. We do agree
something must be done.
Let's go to Commissioner Manus.
STATEMENT OF HON. MIKE MANUS, COMMISSIONER,
PEND OREILLE COUNTY, WASHINGTON
Mr. Manus. Good morning, Chairman Murkowski, Ranking Member
Cantwell and members of the Committee.
My name is Mike Manus. I'm a County Commissioner from Pend
Oreille County, Washington State, home of 530 acres of the
Colville National Forest and a portion of the Idaho Panhandle
National Forest. That is 58 percent of our total land mass in
the county.
As a small rural county of 13,000 people, we have survived
on our ability to use our natural resources as a form of
employment, recreation and tourism due to the sheer beauty they
provide. Now those same beautiful forests are a detriment
attributed to being poorly managed and are at risk of severe
fire.
As a board member of the Washington State Association of
Counties, WSAC, I am grateful to the Committee for this
opportunity to share my views on behalf of the Evergreen Forest
County group in Washington State and National Forest Counties
and Schools Coalition. Losing SRS is hurting us in many ways.
First, the county road department has two grants totaling
$2.7 million, requiring a $316,000 match. It would be a
travesty for our county to refuse these grants and repay the
money already spent on design but that's where we're at.
In 2015, Pend Oreille County endured several large
wildfires, all started naturally, on U.S. Forest System land.
The county employees were stretched because of these fires.
There was no compensation to cover lost revenues to businesses
and tourism came to a halt. I specifically want to thank
Senator Cantwell's unwavering efforts to help Pend Oreille
County recover from this tragedy and for her work to reform
fire borrowing.
Senators, our population growth is stagnant and our economy
is flat. We have one of the highest unemployment rates in
Washington State at nine percent. Our poverty continues to
climb. Schools and counties are constantly reminded that SRS
was meant to be temporary as each local economy diversified
itself into mini silicon valleys divorced of the historic
reality of timber-based economies. That hasn't happened.
In Congress today there has developed among some a twisted
logic that if counties are deprived of SRS payments, somehow
that will motivate Congress to enact new active management and
the fire borrowing reform bill. In fact, it's the
schoolchildren in rural counties who suffer from such thinking.
We need a long-term, active forest management, fire borrowing
reform bill passed soon. But please, do not hold schools and
counties hostage in the meantime.
By way of background, the State of Washington, following
Wisconsin's amazing success, has just signed an agreement with
the Forest Service to implement Good Neighbor Authority.
Washington's DNR produces 500 percent more timber revenue on
one quarter of the land base of that held by the U.S. Forest
Service.
I declare it is schoolchildren and county services that
suffer because of Congress' failure to pass SRS, active
national forest management and fire borrowing reform
legislation. Until Congress acts to put in place those
legislative solutions, counties must have SRS payments continue
for at least five to ten years, just to see if the reforms,
once passed, work and stabilize national forest dependent
economies.
We must first see if the private sector will invest in new
sawmills and infrastructure. Congress should create a sliding
scale. As revenues from timber harvest increase to sustainable
levels, only then should SRS be reduced and ultimately
eliminated.
Congress caused this problem. Congress can solve this
problem. We should no longer be used as pawns in a House/Senate
chess game that leaves us guessing about whether SRS funding
from one year to the next will be available.
There is a ticking time bomb members of this Committee must
be aware of. If SRS goes and is no longer calculated as a prior
year payment deduction under the PILT formula, the
Congressional Research Service has told us Pacific Northwest
timber counties will be entitled to receive full PILT payments.
That increase will not come close to offsetting the loss from
SRS payments, but it will be taken away from those
intermountain west counties in need of SRS.
There will be a seismic shift in the way PILT payments are
made if Congress fails to extend SRS. It will be a lose/lose
proposition as new PILT funds heading toward the timber
counties fail to remotely come close to existing SRS payments
and as desert and prairie counties and Alaska's non-forest
boroughs lose 20 percent or more of existing PILT payments. No
one will escape the carnage.
One last point involves change to the SRS Title II and
Title III funds as currently administered. I offered in my
written testimony specific ways to change this.
I look forward to working with you to pass legislation that
will enhance our national forests, prevent catastrophic
wildfires and secure permanent PILT funding and funds to bridge
the gap for the interim for SRS.
We all need your support to protect our environment,
enhance our economy, educate our youth, to build our roads and
assist our emergency responders.
Thank you.
[The prepared statement of Mr. Manus follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Commissioner.
Mr. Haggerty, welcome.
STATEMENT OF MARK HAGGERTY, HEADWATERS ECONOMICS
Mr. Haggerty. Thank you, Chairman Murkowski, Ranking Member
Cantwell and members of the Committee. I'm pleased to join you
today to discuss the need to provide greater fiscal certainty
to counties with federal lands.
I want to use my time today to describe an idea that could
offer greater fiscal certainty to local governments: building
an endowment for counties and their schools by creating a
permanent trust funded with commercial receipts from federal
lands. Such an endowment would fund a long-term reauthorization
of Secure Rural Schools and Community Self-Determination Act.
While SRS has funded critical rural infrastructure and
services for 15 years, it has become clear that asking Congress
to reauthorize SRS annually without a long-term funding plan in
place is an untenable position. Annual revenue sharing payments
are permanently authorized but relying on increased timber
harvest is not a solution by itself that improves fiscal
certainty and would fall short of keeping most counties whole
with respect to SRS.
Creating a permanent trust combines these two approaches to
create a permanent and stable funding source and ensure
predictable and rising payments to counties year over year. A
key difference between the permanent trust model and annual
revenue sharing is that a trust stabilizes revenues over time
insulating counties from uncertainty and inequity associated
with annual revenue sharing payments. Continuing SRS payments
would keep counties whole and the endowment would lower the
cost of SRS each year until congressional funding is no longer
necessary.
Permanent funds are commonly used by states across the West
that have a fiduciary responsibility to manage state lands to
generate revenue for schools. Alaska, Louisiana, Texas, Wyoming
and others have trust funds with a combined value of more than
$100 billion.
The Forest Service and Bureau of Land Management are also
essentially being asked to manage federal lands to generate
revenue for local governments, including schools. A permanent
trust could be the right approach for these lands too.
There's a growing body of research and experience that
suggests becoming too reliant on uncertain revenue from natural
resources can, over time, expose rural counties to greater risk
of fiscal crisis.
For example, Clearwater County, Idaho, where I visited last
week, is working to retain regional mill capacity and skilled
workers to do needed forest restoration and maintain a viable
commercial logging industry. And they're working to diversify
their economy.
Declining school enrollment and budget cuts have
jeopardized the gifted and talented programs, shop, art and
music classes and the school district is now on a four-day week
and cannot support all day kindergarten. Losing SRS and less
than full funding for PILT would require deeper cuts.
The cuts are looming as the county, like others across the
U.S., are being asked to take on increasing responsibilities,
including in coordinating economic development activities.
Attracting and retaining families and businesses in rural
communities will become increasingly difficult without good
schools, road infrastructure and quality services.
The current system of county payments is broken. The annual
battle of appropriations needs to end and counties deserve
predictable and stable payments. A new permanent trust at the
federal level that would remake the fiscal relationship between
federal lands and counties could resolve these issues.
If a permanent trust is established, receipts would be
deposited into the trust instead of being shared with counties
on an annual basis. The principle balance of the trust would be
held in perpetuity and invested to earn income. An independent
entity, such as the National Forest Foundation, could establish
and manage the permanent trust with oversight from Congress and
the Administration. At the end of each fiscal year, a
distribution would be credited to the U.S. Treasury to offset
the cost of authorized appropriations while a portion of the
distribution could also be sent forward to counties annually.
How permanently or how quickly a permanent trust could
replace annual revenue sharing payments and SRS would depend on
how much is invested into the trust every year. How long the
principle balance is invested before it starts making
distributions and Congress could also make a one-time
appropriation up front to capitalize the trust.
Had Congress established a trust in 2000, today it would be
worth $1.2 to $1.5 billion. It would be able to make annual
distributions equal to or greater than current levels of annual
commercial receipts. In other words, counties would already be
better off with predictable and stable distributions from a
trust that match or exceed current revenue sharing payments.
I look forward to continued discussions. And I'm happy to
answer any questions that you may have.
[The prepared statement of Mr. Haggerty follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Mr. Haggerty.
And last, we will turn to Mr. Whitney, welcome.
STATEMENT OF HON. MARK WHITNEY, COMMISSIONER, BEAVER COUNTY,
UTAH, AND PRESIDENT, UTAH ASSOCIATION OF COUNTIES ON BEHALF OF
THE NATIONAL ASSOCIATION OF COUNTIES
Mr. Whitney. Thank you and good morning, Chairman
Murkowski, Ranking Member Cantwell and members of the
Committee. Thank you for holding today's timely hearing to
examine federal payments to local governments provided through
the Secure Rural Schools and Payments in Lieu of Taxes programs
and for inviting me to testify today on behalf of the National
Association of Counties.
My name is Mark Whitney, and I serve on the Beaver County,
Utah Board of County Commissioners. I'm also the current
President of the Utah Association of Counties. And I have
personally seen, first-hand, the challenges public lands and
federal forest counties face as we seek to provide a residence
with essential services in the face of strict revenue and
budgetary constraints.
Beaver County has a population of approximately 6,700
people and spans an area of over 1.6 million acres, nearly 1.3
million acres or more than 77 percent is owned by the Federal
Government.
And my county is not alone. Sixty-two percent of counties
nationwide have federal land within our boundaries and federal
policies have direct impact on our communities. There are two
key programs that assist federal lands counties to provide
services, not only to residents and visitors of the federal
land, but also to provide services on that land.
For over 40 years, PILT has assisted counties to offset
losses in tax revenues due to the presence of substantial
acreage of federal land in our jurisdictions. Since we cannot
tax the property values or products derived from federal lands,
these payments are critical to support essential government
services mandated by law like first responders and emergency
services, transportation infrastructure, law enforcement,
education and health care in nearly 2,000 counties.
Nearly 78 percent of Beaver County is eligible for PILT.
Last year for nearly 1.3 million acres of PILT and entitlement
land within our county's borders, the Interior Department paid
us about 75 cents per acre. Overall PILT funding accounts for
approximately ten percent of our county's annual budget.
Moving forward we continue to urge leadership on both sides
of the aisle to develop a fully responsible, long-term and
sustainable legislative solution to fully fund PILT and
eliminate the ongoing funding uncertainty currently facing
public lands counties.
The Secure Rural Schools program is equally critical to us
and aids over 700 counties, parishes and boroughs and over
4,000 school districts affected by the decline in revenue from
timber harvest on federal lands. These payments help ensure the
students receive education services and that we can maintain
our roads and bridges and provide emergency services for our
citizens. If SRS is not immediately reauthorized we will again
be forced to make drastic cuts to the services on which our
residents rely.
For example, only three percent of the land in, my neighbor
to the south, Garfield County is taxable. That is not a large
enough tax base to sustain the services the residents need. SRS
is an indispensable component of meeting those needs. Without
SRS counties and school districts are forced to lay off staff,
reduce services and make drastic cuts that weaken our
communities.
And do not forget that PILT and SRS are intertwined. If
Congress does not reauthorize SRS, counties receiving PILT
could face reduced payments because a previous year's SRS would
no longer be deducted under the PILT formula. For Utah alone,
our PILT payment would be reduced by 25 percent. For my county,
it would mean almost a 40 percent cut. Counties urge you to
reauthorize SRS as you work to reform forest management.
And finally, I cannot stress enough, we need a stronger
federal partner when it comes to management of our nation's
federal forests. The health of our forests continues to
decline, fire risk is increasing, and without treatment of
active management useable timber is quickly declining.
Counties need full coordination with our federal partners
to improve the health of our forests, increase the economic
well-being of our communities and mitigate the risk of fires.
Members of the Committee, thank you for the opportunity to
share Beaver County's story. We look forward to working with
you to develop and pass legislation to fully fund PILT and
reauthorize SRS now.
Thank you again. I welcome any questions y'all have.
[The prepared statement of Mr. Whitney follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Mr. Whitney, thank you very much.
We appreciate all that you have delivered. You clearly laid
the case for why PILT and SRS are so important to our rural
counties, whether it is three percent as you suggest in the
county neighboring yours, Mr. Whitney, or the one half of one
percent that is available in terms of a taxable land base. It
is pretty tough to dispute the fact that it is hard to squeeze
revenues out of these areas that are managed by our federal
landlords, so to speak.
I want to ask a quick question of Mr. Casamassa. This
relates to how we are managing the Tongass. I think we have
heard from my colleague here in Washington, Senator Cantwell,
that you have a situation where you are seeing lands that are
managed much more sustainably and they are able to produce
significantly more timber revenue than the Forest Service is
able to do in a state like Alaska, and yet, far less of a land
base there.
Mr. Manus, you had highlighted the fact that Washington has
been able to use 2.1 million acres to yield a harvest of 560
million board feet, generating 220 million board feet in
Washington. I think Mayor Landis would be envious of that. I
know that I am.
In our state, as I mentioned, we harvested just three
million board feet last year. Over the last ten years we have
averaged about 35 million board feet. Again, we are talking
about the Tongass, which has 17 million acres. You can see why,
as Mayor Landis suggested, they are looking to different
opportunities such as the creation of a state forest.
Why are we having such a hard time here increasing the work
that could be done within our national forests, both in terms
of forest health, because we have heard many members address
that this morning, as well as the commercial timber production?
Why aren't we doing what, most will say, we need to be
doing?
Mr. Casamassa. Well, Chairman Murkowski, certainly the
Forest Service has, to a degree, increased our overall hazard
fuel reduction across the landscape over the course of the last
decade. We, last year alone, offered and sold about 2.9 billion
board feet. And we continue to look for ways to increase our
ability to provide for and respond to the needs of the various
communities and counties that we serve.
The Chairman. In terms of what the Forest Service spends to
prepare and implement a timber sale, why is it so out of
alignment?
I am told that Forest Service spends $100 or more per
million board feet to prepare and implement a timber sale while
a state sale, on average, costs only $25 per million board
feet. It just does not line up here. Why?
Mr. Casamassa. I certainly appreciate that, those
comparisons. Clearly the states have a different mandate by
which they support and implement forest management. The Forest
Service has a different mandate, has to balance a wider array
of resources.
The Chairman. But do you think that a discrepancy that is
that wide, $100 per million board feet versus $25 per million
board feet, do you think that justifies that discrepancy?
You say that the federal mandate is different than the
state mandate. At the end of the day, what you are doing is you
are ensuring for a level of timber harvest. You are doing it in
a responsive way, working to meet very clear environmental
standards that are set.
I think that whether you are the State of Alaska or the
State of Washington or the State of Oregon, you want to make
sure that you have done it responsibly. Does it really make
sense to have that kind of a differential?
Mr. Casamassa. Well, I think that overall, we are taking a
look at and we are being a bit more streamlined with our
approach to how we lay out and do the work associated with
cruising and contract preparation for our timber sales. And we
are seeing some reductions in the overall prep costs, but
clearly, not to the degree that, you know, in comparison to
what you just provided with respect to the $25 versus $100 of
the preparation.
The Chairman. It just seems to me that we could learn from
some of the states in how they are able to manage and manage in
a way that gives more benefit, ultimately, while at the same
time, making sure that it is done, harvested responsibly.
Mr. Casamassa. And I think to answer that question, put a
finer point on the authorities that we have. Good neighbor
authority is one of those ways that, I think, we continue to
collaborate with and work with the states to streamline process
and be more effective in the approach to how we go about
offering sales, managing and managing national forest system
lands.
The Chairman. Well, we will continue the discussion.
Senator Cantwell.
Senator Cantwell. Thank you, Madam Chair.
I just wanted to get, if I could, the witnesses on record
about whether we should fix this SRS problem now, ASAP, and not
wait for other discussions.
I find, oftentimes, that SRS gets held hostage to doing two
or three other things first, and so I just want to understand
from the witnesses whether they think we should just get this
done so that we can give counties certainty right now or wait
for this to be paired with forest management legislation. I
actually want to hear what everybody has to say.
Mr. Manus. Yes, we need to get SRS in the system as soon as
possible. It's a detriment to all the counties, school
districts, as you mentioned, Senator.
The young lady in the back of me here is from Skamania
County. The shortfall she's facing in her school district is
intolerable, and they need help right now.
Senator Cantwell. Thank you.
Mr. Manus. We can fix the other issues at another point in
time, hopefully, in the same session, but on another bill.
Senator Cantwell. Thank you.
Mr. Manus. Thank you.
Senator Cantwell. Other witnesses?
Mr. Haggerty? Mr. Whitney? Yes?
Mr. Cruickshank. Yes, thank you for the question, Senator
Cantwell.
Most school districts are in the budget process right now.
They work on a July 1 to June 30th cycle, and I'm constantly
receiving calls from our school districts saying, where is SRS?
You know, they're looking at that so that they're not having to
do those layoffs.
And for counties with road departments, like ours, right
now we're looking at what do we do next year--with a 40 percent
cut in our budget.
So, SRS is very important to the schools to have it
reauthorized immediately and in the short-term. Counties are
going to be looking for SRS.
So, thank you for the question.
Senator Cantwell. Thank you.
Yes, Mr. Whitney?
Mr. Whitney. Thank you for that question, again, Senator
Cantwell.
On behalf of the National Association of Counties and also
my own county, SRS is so pivotal to the survival of our school
districts, especially in these rural counties that depend on
active forest management, but that management is not really
there today.
So, we have to have a bridge to get to the point in the
future when we again have active forest management. We have to
have this funding because these schools, every one of them--my
own school district included, will suffer if SRS is not funded.
There will be no music programs; there will be sports programs
that are cut out; teachers laid off. This has a devastating
effect all across the country.
So, thank you.
Senator Cantwell. Thank you.
Thank you for your response.
Thank you, Madam Chair.
The Chairman. Mayor Landis--he was going to weigh in.
Mr. Landis. Just very briefly, thank you, Senator Cantwell.
I do believe, also, that it needs to be reauthorized and
funded quickly and solved quickly. And the reason,
specifically, is that the funding is going down drastically and
looking at a graph where it's steeply declined; and for our SRS
funding, it's $1.7 million down to, we project, $750,000 this
year.
I think we need to stick a pin in this and not get used to
starving and make that the norm. So, before it gets too much
more degraded, I think that we should have a solution.
Thank you.
Senator Cantwell. Thank you.
I thank all the witnesses for that. I tried to leave it off
with you, Mr. Whitney, because I wasn't meaning to let Mr.
Landis not weigh in here. But the issue, I think you said it
best, we've got to quit fooling around with this and acting
like it can't be solved until something else is solved when in
reality, we need to solve this first and then we can get to
these other discussions.
And I am happy to have them. I think that is exactly what
the Pine pilot is, a strategy that tries to get access to more
board feet and solve some of our forest fire borrowing
problems.
Thank you, Madam Chair.
The Chairman. Thank you.
Senator Daines.
Senator Daines. Thank you, Chair Murkowski and Ranking
Member Cantwell, for having this important and timely hearing.
I hear from Montana counties every year. In fact, at the
moment, about every hour, about their frustration with the
uncertainty that is being created with the appropriations
process and regarding PILT and the Secure Rural Schools
program.
You know, I spent 28 years in the private sector before
coming up to Congress. It is hard to believe that we are now 7
months into the fiscal year of the Federal Government and we
have not passed all the appropriations bills.
And I can guarantee you, in about four more months, we will
be right back here in debate having the drama about CRs, about
shutdowns, and so forth here because this institution cannot
pass appropriations bills. It is ridiculous, it really is. It
is such a broken process.
I worked at Proctor and Gamble for 13 years. I was in the
health and beauty care business, in the shampoos. This reminds
me of lather, rinse, repeat, over and over again here in
Washington.
With SRS in particular, since the program has expired, I
mean, it is ridiculous. This is a program that expired. Our
counties are counting on it, and this program expired a couple
years ago.
Forest management remains woefully inadequate, and that is
really the root cause here to get back to proper management of
our public lands.
Our counties recently received only a small fraction under
the previous and historic 25 percent formula compared to what
they had been receiving under SRS. My county commissioners in
Montana--and if you want to talk about what local government is
all about, I think you look at our county commissioners. They
are really the cool face of the decision-making, every pothole,
every complaint, comes to those county commissioners. They are
true public servants. They have told me that this sharp cut
will result in layoffs and fewer road and school projects being
completed because this institution can't get its act together
in Washington, DC.
Our Montana counties are frustrated with the pace and the
scale of active forest management. Let's not forget we have got
the problem with SRS and with PILT. But that is, in some ways,
a bandaid that is covering up the real problem here is what
once upon a time we used to have active forest management and
revenues coming to our counties. It is unfair to our counties
in rural America to keep them in limbo each year in
appropriations, while doing nothing to improve the management
of our federal lands.
I certainly support reauthorizing SRS. Count me in with
both feet as supporting it.
At the same time, it is absolutely paramount that this
Committee and this Congress pass strong forest management
reform legislation that restores active management to our
national forests, because an actively managed national forest
is a healthier forest. It reduces wildfire risk. It is better
for wildlife habitat.
I spent a lot of time in the back country. We need to get
back to active management, and we need to address the chronic
litigation from fringe groups which has stopped us in our
tracks in Montana so many times.
Mr. Whitney, you spoke to the need to restore active forest
management in your testimony. Can you elaborate on the economic
and environmental benefits to increasing the pace and the scale
of management?
Mr. Whitney. Thank you for that question, Senator Daines.
Active forest management is so critical. It's--without the
management we risk more forest fires. With the management, we
can harvest timber, making them healthy forests, making our
counties vibrant again.
The rule is, I think, it's 25 percent of all receipts that
come off these Forest Service lands on timber harvest go to
counties and school districts. So, it is pivotal. I can't
express that enough.
Senator Daines. Commissioner Manus, I understand that Pend
Oreille County is concerned about the fringe litigation against
the collaboratively developed A to Z project in the Colville
National Forest. Montana knows all too well how fringe
litigators can block responsible forest management.
While I know you cannot speak specifically about the active
lawsuit, can you talk generally about how litigation needlessly
slows forest management and undermines the work of
collaborative groups?
Mr. Manus. Thank you for that question, Senator Daines.
We are involved in litigation currently. The county signed
on with the Forest Service and with our collaborative group out
of Spokane, including the Lands Council, in responding to
litigation to help the A to Z project move forward. Currently,
we are scheduled on June 13th to be in the Ninth Circuit Court.
Hopefully this will end the litigation. So far, we've been able
to prevail.
The county signed on with American Forestry Resource
Council, and the beauty of that program was it didn't cost us
any money. They defended us on that litigation.
We have a collaborative in the Colville National Forest
called NEWFC, Northeast Washington Forest Coalition, that has
worked very hard on this timber sale, the A-to-Z, which is a
new model that we hope to use in the future. It's a very large
timber sale.
Through that effort the collaborative group came up with a
great sale, and it was litigated by a group out of Montana
that, as far as I'm concerned, should not have standing because
they weren't at the table when this process was being made.
Senator Daines. Most of those litigators are not.
Mr. Manus. And that should change.
Senator Daines. I agree.
Thank you.
Mr. Manus. Thank you.
The Chairman. Senator Wyden.
Senator Wyden. Thank you, Madam Chair, and thank you and
Senator Cantwell for spearheading this effort. Clearly the
sense of urgency that we are seeing from the witnesses, Senator
Cantwell reflected in her question and your comments, is the
heart of the challenge, the immediate challenge.
I think what I want to do, because we have all sympathizers
here from the West, is try to put this in a little bit of
context.
The first question I want to direct to you, Mr. Casamassa.
On December 23rd of 2014, Forest Service Chief Tidwell, in
response to my question, said that you would have to have a
sixfold increase over the current harvest to equal the value of
the Secure Rural Schools payments receipt. Do you disagree with
what the Chief had to say then?
Mr. Casamassa. Senator Wyden, no. I think that there is a
formula that you could follow that would then look at the
receipts, the SRS payments, then the difference between the
receipts generated and the payments and then formulaically
calculate to the degree necessary that there would have to be
an increase.
Senator Wyden. My time is a little short. But you do not
disagree with what the Chief said?
Mr. Casamassa. No, I do not.
Senator Wyden. Colleagues, this, in my view, is the heart
of the challenge because when I look around this room we all
think that you have to fight this battle on several fronts. The
reason we feel so strongly about Secure Rural Schools and the
urgency is without it, we are not going to keep the doors open
in much of rural America. That is what was coming out in the
early questions.
That is why Senator Craig and I wrote this bill in 1999,
and I am not sure most of the Senate even knew who I was. I had
just arrived. So it was brand new, but that was the key to keep
the doors open.
All of us here support increasing the harvest in a
sustainable way and that is active management. Okay? So that is
kind of tier II. And all of us support changing this crazy,
absolutely bonkers program of funding firefighting that we call
``fire borrowing.''
Senator Crapo and I have had a bill with 200 citizens'
groups. I support the efforts our Chair and our Vice Chair,
Senator Cantwell, have been involved in. We are all in on the
whole agenda but the heart of it has got to be keeping the
doors open because if you do not keep the doors open,
everything else goes by the wayside. That is what is behind the
urgency.
So I want to make one other substantive point with you, Mr.
Casamassa. Back over the years, when I was Chair and Senator
Murkowski was Ranking Member, we talked a lot about it. People
always say, hey, you know, this thing they did in 1999 was kind
of a welfare program and it was supposed to phase out. That is
not accurate.
From the very get-go, Title II was about county payments
but also about active management, and Title II funds programs
like reducing hazardous forest fuels. That is what keeps
communities safe is reducing those fuels. That is what Senator
Cantwell wants to do with that model project. It was about
reducing hazardous fuels and about the county payments, a
safety net portion.
Mr. Casamassa, could you get us a list of the projects done
under Title II that address this active management issue,
because I cannot tell you how many times people tell me, oh
Ron, you did something good back in 1999 and the air was pure
and the oxen had big heads and, you know, all that. But this is
a different day. That is not the history of this program. The
history of this program was to use Title II, in particular, to
help communities find common ground. You had environmentalist
folks, you had timber industry people, and they have done so.
Could you get us a list of the active management programs
that are funded under Title II?
Mr. Casamassa. Yes, we can, Senator.
Senator Wyden. Great.
Madam Chair, I so appreciate you are doing this now. This
is the key time window.
As you know, Senator Cantwell and I are on the Finance
Committee. We are deeply committed to working with you and
Chairman Hatch in getting a payment kind of process. But so
colleagues know, this is not one of these deals where they are
mutually exclusive, where you do one or the other. We are all
in on all of the key parts which is active management, keeping
the doors open and ending this bonkers system of fighting fire
borrowing.
I am over my time, Madam Chair, but thank you. You and I
have been at this for a lot of years, and I think under the
leadership of you and Senator Cantwell and all the colleagues
here we could put this thing to rest now.
The Chairman. I thank you for that.
I think it is particularly important and relevant that you
speak to the history of the program and why it was put in place
in the first place so that it is well and clearly understood.
So again, thank you and we look forward to working with you
on these really urgent issues.
Senator Risch.
Senator Risch. Thank you, Madam Chairman. Thank you for
holding this hearing.
Unfortunately, it is all of us talking to each other.
Everybody in this room knows what the problem is, and it is a
really, really serious problem.
We are fortunate to have the world's leading authority on
SRS here. I say that in good humor, but I am serious about
that, Senator Wyden. You have been a champion of this. You fly
the flag for this, and we all sincerely appreciate it.
What I want to talk about is that it is a solution. And
Senator Cantwell is absolutely right. These counties need help
right now. I mean, we need to pass this and it needs to be done
right now.
The problem with that is when Congress does that, we do the
reauthorization. It will be for a few years or something like
that and then we are going to be right back in the same
situation again. I think we can walk and chew gum at the same
time. I think we can do that, but I think we really need to
talk about a long-term solution.
Senator Wyden, you are notorious for thinking outside the
box, and that's really what brought us SRS in the first place.
You have rightfully acknowledged that this is not 1999. I
think the foundation that this was built on has changed
dramatically since 1999, and that is simply forest harvest. If
you look at a bar chart about how many million board feet come
off, it is so different today than it was in 1999. So what can
we do about this?
Well, the solution actually is at hand. And for us who are
concerned about this, the Western states that have these
issues, we can do this. This is a bipartisan issue and should
be done on a bipartisan basis.
I think a foundation to talk about this is the Community
Trust Act that actually passed the House. Now it is not exactly
the way I would do it, but let me tell you what the foundation
of the thinking for that is. It is similar to what Mr. Haggerty
put on the table, and that is to have a separate funding
mechanism for funding this over the long haul on a permanent
basis. I would disagree with him on having a third party and a
big national endowment. These things are better done on the
state level. The states are really good at that, and I can
prove it.
Finally, for the year that we have statistics available,
the State of Idaho State Lands Department manages 1.5 million
acres of land. From that, they harvested and generated on a
sustained basis $330 million.
The United States Forest Service manages a little over 22
million acres in the State of Idaho. That same year that the
state got $330 million off 1.5 million, the Federal Government
received $75 million off 22 million acres of federal grounds.
Now admittedly, you are going to say, well, yes, but there
is a lot of wilderness area in there and that is all true.
Nonetheless, on timber-producing grounds, we far outstripped
the Federal Government.
Mr. Casamassa is right. They have a different mission. They
have different responsibilities. But it is not that wide, as
the Chairman pointed out. So let's look to the states to do
that.
And this Community Trust bill is a good starting point.
Like I said, there are ways I would do it differently and the
main suggestion I would have for the Community Trust bill is
what--Gordon, correct me if I am wrong here--200,000 acres in
Idaho for the trust to generate income on?
Mr. Cruickshank. That's correct.
Senator Risch. Okay.
Mr. Cruickshank. On that 200,000 acres, if it's done
sustainably, would take care of ten percent of our SRS funds.
Senator Risch. That 200,000 acres makes up less than one
percent of the federal ground. Now the environmental community
is concerned on two fronts.
Number one, they think this is just the first step of
transferring title to the states. We have to assure them that
that is an issue that should not get bound up in this and it
has, really, nothing to do with this.
The second thing is the environmental community, at least
in Idaho, most of them, not all of them, but the vast majority
of them, have proven themselves to be responsible people as far
as doing what they want to do. They ought to be involved in
identifying the 200,000 acres so that it is a collaborative
effort that identifies the 200,000 acres. And it ought to be a
collaborative effort that moves forward, that is, managed by
the State Lands Department, but also has at least an advisory
committee that is made up of a broad spectrum of stakeholders
on the national lands. If you did that, I think you could put
in place a permanent way of taking care of the SRS.
Senator Wyden, I throw this out for your consideration
because I know how good you are thinking outside the box.
Senator Wyden. Madam Chair?
The Chairman. Senator Wyden.
Senator Wyden. Can I just take 30 seconds to respond? I
know colleagues are waiting.
Ryan Zinke, the new Secretary of the Interior, has said
that he is not for widespread state transfer from federal to
state.
Senator Risch. And we all know that is not going to happen.
Senator Wyden. I guess my only point is there are a whole
lot of models out there.
Senator Cantwell has a very good one in Washington State.
We have one from Oregon that would double the harvest on a
sustainable basis, every year for 50 years, and we have
environmental support.
We want to work with you but when Ryan Zinke, the new
Secretary of the Interior, says he is not for state transfer, I
think that sends a message.
Senator Risch. Well, it does.
It is a practical message because people talk about this,
but there is never going to be a wholesale transfer. It simply
is not going to happen. As much as people would like it to
happen, as much, regardless of what side you are on, you have
got to face the realities of it.
If you do something like the Community Trust bill or like
your provision or Senator Cantwell's, you get to some ground
that you might be able to make.
My time is up and I thank you, Madam Chairman, but again,
this is a problem for this Committee on a very bipartisan basis
for people who have large percentage holdings of federal land.
We can do this.
Thank you.
The Chairman. Thank you, Senator Risch.
I appreciate the conversation and the dialogue. I think
this is exactly the type of discussion that we need to build on
a bipartisan basis that is going to lead to a different result,
because we have been doing the same thing for a long time and
our communities are freaked out just about every year as they
deal with the uncertainty.
Let's go to Senator Heinrich.
Senator Heinrich. Madam Chair, I learned from our colleague
from Maine, that Maine is apparently the most heavily forested
state in the nation. What I appreciate about Senator King being
here is that if you look around this dais today, you don't see
a lot of Easterners here and that is part of the problem.
I want to really recognize the effort of everyone who is
here focusing on this issue. We have got to get this done. But
I especially appreciate it when our members from back east show
up for these things because this is, sort of, a do-or-die
situation for us.
The Chairman. We do appreciate Senator King.
Senator King. I do want to enter into this discussion.
Thank you.
The Chairman. Thank you. We look forward to that.
Senator Heinrich. I do not think it is any secret that
rural communities around the country are struggling, and it is
certainly true in New Mexico. I think the last thing we should
be doing is pulling the rug out from under them by ending the
Secure Rural Schools program.
Now, before it expired, SRS provided funds for schools and
roads and public safety in counties with national forests. But
in truth, the impact of these funds, as our witnesses can
attest, is much broader than that because counties now have to
fill in their school and road budgets from their general funds
and that means they are unable to meet other critical needs.
I want to share just a couple examples from New Mexico, in
particular.
Sierra County in New Mexico was planning to start a new
mental health program in the county, a desperately needed
program in an underserved area. But now, because their county
payment was cut from $154,000 to only $6,000, they have had to
redirect the funds from mental health into law enforcement and
road projects that would have been covered by SRS.
In Cibola County, county officials have had to eliminate
all road improvement projects. Let me say that again, eliminate
ALL road improvement projects. They will even need to cut back
on routine maintenance on school bus routes. This means that
people in the far reaches of that county are more likely to get
trapped at home in bad weather and school buses are more likely
to get stuck on poorly maintained roads.
This is simply not sustainable. We cannot leave rural
communities hanging on while we debate forest policy here in
Washington. Rural counties need these programs. They need them
to be reliable and they need them now.
Ms. Ferriter, I want to go back to something, and we have
talked about this a little bit, but I think it is going to be
really important for our colleagues to understand.
In New Mexico and a number of the other states, we have
counties that receive PILT but not SRS. But even those counties
are deeply concerned about the expiration of SRS, and that is
because PILT payments will have to increase for counties who
used to receive funds from both programs because the PILT
formula includes an offset for those SRS funds.
Could either you or Mr. Casamassa walk us through, very
explicitly, the intersection of these two programs and, in the
absence of SRS, will we simply need to increase PILT
appropriations and if so, by how much, if we were to make those
counties whole?
Ms. Ferriter. Thank you for the question.
And you are correct that the having SRS not authorized will
impact the PILT. It won't impact for FY2017, but it will for
2018. And the reason is because for the counties that do
receive the SRS when we do the PILT calculation those SRS funds
are taken into consideration.
So, if SRS is not reauthorized, it's going to mean that the
PILT, the statutory calculation for PILT, would be expected to
go up and it means that more counties would be looking to have
a slice of the PILT pie.
Senator Heinrich. Mr. Casamassa, do you want to add
anything to that--
Mr. Casamassa. No, I think that certainly sums it up. There
is that they are both inextricably linked, PILT and SRS, when
it comes to those counties that have national forest land in
them. So they are linked, and it's directly proportional to
PILT payments if you do not have the SRS there.
Senator Heinrich. And obviously a lot of us in the
intermountain West have counties where there are primarily BLM
lands, for example. They are just as impacted because of this
rob-Peter-to-pay-Paul sort of situation.
Commissioner?
Mr. Cruickshank. Senator Heinrich, I just have to say this
that the calculations that the counties have worked out is that
the SRS is not taken away from or doesn't take away from the
PILT. The PILT would need another $161 million to fully fund
all the counties, to keep all the counties whole.
Thank you.
Senator Heinrich. No, I appreciate that very much.
And I want to say, once again, thank you to the Chair and
the Ranking Member. There are not a lot of issues like this
where we find this much unanimity on the Committee, so I think
it is incumbent upon all of us to make this right.
Thank you, Madam Chair.
The Chairman. Senator Risch and I were just discussing that
there is a lot of opportunity here to work to find a solution
and have that solution be long-term and enduring.
Thank you.
Senator Lee.
Senator Lee. Thank you very much, Madam Chair.
I want to welcome to our Committee again, my friend, Mark
Whitney, who in addition to being just a fantastic citizen of
Utah, has served his county for more than a dozen years as a
Commissioner and is now the head of the Utah Association of
Counties, which is a big deal. We are honored to have you here,
sir.
I think the problem that we face with PILT, the Payment in
Lieu of Taxes program, is a classic problem of Washington's
creation. It is a classic Washington solution in the sense that
it is, sort of, no solution at all. There is a problem in that
there are states, and Utah is one of those states, where the
Federal Government owns a lot of land.
In Utah, it happens to be two-thirds of the land. And
because the Federal Government has exempted itself from
property taxes, this leaves counties throughout my state with
an inability to collect a source of revenue that they rely on
to fund everything from police and search and rescue services,
to road maintenance and schools--and this ends up creating a
big problem.
To deal with that problem, Congress has come up with PILT
and uses a formula, a formula it may or may not use at any
given moment, and then leaves the states subject to the will
and whim of Congress as to when, whether, to what extent, and
how to follow through on its plan to provide these payments in
lieu of property taxes. But again, this is not really a
solution at all because it leaves most of our counties
impoverished. It leaves most of our counties without the
ability to collect anything close to the amount of revenue that
they would collect if they could tax that land, even at the
lowest rates.
Last year, 56 Senators--56 members of the U.S. Senate--
voted in favor of my proposed amendment to the PILT program.
This is an amendment that would give counties the option of
collecting PILT revenue at the level they would have received
if but for federal ownership of land in their county.
I would like to note that these were not all Republican
votes. There was some bipartisan support for the bill,
including at least one member of this Committee, Senator
Manchin from West Virginia, who voted for it.
Mr. Whitney, if Beaver County's PILT payment more
accurately reflected the obligations imposed upon your county,
what would you be able to do with that money?
Mr. Whitney. Thank you for that question, Senator Lee.
There are many things that we could do in our county. It
takes everything we've got. We've got over 900 miles of roads
that we have to take care of with only 6,300 or 6,700 citizens.
Only 100, roughly 130 of those, qualify for B and C road funds
from the state. So the rest of it has to come out of our
general fund or PILT. We are not able to keep those roads at a
maximum level of safety. We need to increase them. There are
many things that we could do.
We could--there's just so many things that we just keep at
a bare minimum of physical responsibilities as Commissioners,
those of us that are closest to the people are the best
government there are. We kick the dirt every day. We understand
the pitfalls. We understand physical responsibility.
So we have to do a balancing act on what moneys we can
spend, what services we can provide. We've got wants and we've
got needs. There's a lot of wants out there, but it's what we
need to provide our people. And unfortunately, because of this,
we can only provide what they need.
Senator Lee. And you, sir, have witnessed firsthand the
fact that this is not just about some aspirational, if
laudable, set of goals. This is often about safety. It is often
about life or death.
In fact, in many instances you are called on, as you have
mentioned, to provide emergency services to people who are on
federal land.
Can you give us any examples of the type of situation that
arises there when you are called upon to provide emergency
services to someone who is on federal land?
Mr. Whitney. Absolutely.
I mean, emergency services, when you've got as many acres
as you do in my county, that are very, very rural and very,
very, you know, not accessible in a lot of cases, emergency
services are pivotal and important to do that. And we need to
ramp that up, as I said, we're very sure of it.
I really complement my county on the services that we are
able to provide, but we could go above and beyond the threshold
and not just this status quo of providing a basic amount of
emergency services. And that would be the same as I have to
also speak with a voice of the Association of Counties all
across the country. I think you've heard the testimony from my
other fellow commissioners and their counties the same story.
Senator Lee. I see my time has expired.
I want to thank you, Commissioner, for coming here today,
and I want to thank you for helping the Committee understand
the unique challenges that you face. The fact that you are
required to, as it were, make bricks without straw to do a lot
with fewer resources than you need. Thank you very much.
Thank you, Madam Chair.
Mr. Whitney. Thank you, Senator.
The Chairman. Thank you, Senator Lee.
Senator Cortez-Masto.
Senator Cortez-Masto. Thank you, Madam Chair. I want to
thank you as well and Ranking Member Cantwell for bringing
together this topic and this important discussion to the rest.
I am the Senator from Nevada and, as many of my colleagues
know and many of you know, Nevada has the largest amount of
public lands of any state in the United States. About 85
percent is owned by the Federal Government which means the
topic we are discussing today is very important to our rural
communities in Nevada. I will tell you, I have had
conversations with NACo about this very subject.
In fact, one county in particular, Nye County, would be
devastated. For example, PILT reductions threaten to undermine
plans to restore the Senior Nutrition program in Nye County.
And it is true what my colleagues are saying and you well know,
rural counties provide basic services and needs that are so
important.
I know this, not only as I sit here today, but I was an
Assistant County Manager in Clark County and my father was a
County Commissioner for many years. People in our counties and
municipalities are on the front lines providing services every
day that are so important.
Our rural communities are challenged. They do not get the
sales tax, property tax, that some of our urban areas get so
they rely on PILT and SRS funding. And I am very supportive of
how we continue to find long-term, sustainability of funding
for our rural communities.
So my question really is to Mr. Haggerty. I was reading
through your comments and appreciate your comments about a
permanent trust. And so, a couple of questions. One, can you
discuss a little bit more and talk about what you mean by
commercial receipts, what you would identify as commercial
receipts? Nevada does not have a lot of revenue from harvesting
timber, so I am curious what you think that would include. And
then, after your comments, I would be curious to know what the
commissioners think about the establishment of a permanent
trust for long-term sustainability of both SRS and PILT.
Mr. Haggerty. Thank you, Senator, for the question.
The trust idea, at least the way that we have written about
it and talked about it as a, kind of, policy idea, would only
use receipts that are currently credited to the 25 percent fund
for the Forest Service and for the BLM O and C lands in Oregon,
the 50 percent revenue sharing payments. And so, those are
primarily timber receipts, but they include all kinds of
revenue from ski area leases in Colorado, to leasing right-of-
ways and other sources of revenue. Timber is certainly the
predominant one.
Senator Cortez-Masto. But there is a discussion of
combining SRS as well as PILT into this trust fund. Is that
correct or no?
Mr. Haggerty. I think, no, I think the simplest way to do
it is to think of the trust as just a purely financial way of
managing the revenue volatility and the uncertainty associated
with receipts to build them over time so that states like
Nevada, even in Montana and Oregon and other places, counties
have different opportunities to generate revenue from federal
lands. This would provide a way to build receipts over time,
stabilize those revenues and create a permanent funding source.
Senator Cortez-Masto. Okay, thank you.
And to the commissioners, I am curious about your thoughts
on that topic.
Mr. Mark Whitney: Yes, thank you for that question. I think
that's a very important question of this distinguished Board of
Commissioners that are with me here.
It's twofold on this answer. We all want active forest
management and to get back to healthy payments under that 25-
percent rule. We also want mineral extraction and mineral
resources on the BLM lands. It's crucial. There are many, many
valuable minerals that are important. We can extract them
within our counties, in these rural areas. But until we can get
there and get that done, we need the bridge to get there.
And so, we've got to fully fund SRS so that the
intertwinement of it with PILT does not take away from our
counties. My county is mainly PILT. And as I said in my
testimony, if SRS sunsets today, then I lose 40 percent of the
revenue in my county because they've got to make the other
counties whole on this.
What I would like to say to each and every one of you,
Chairman Murkowski and the rest of you, if you would talk to
your colleagues and really emphasize, both in the House and in
the Senate. Our great Senator Hatch is introducing a bill
tomorrow that is going to fully fund SRS. It's very important
that that bill passes. Please support that bill until we can
get something done to get back to active forest management and
mineral resources and extraction on BLM lands.
Senator Cortez-Masto. Thank you.
Any other commissioners have a comment, please?
Mr. Cruickshank. Yes, Senator Cortez-Masto, thank you for
the question.
I was one of the Idaho County Commissioners that helped
create that Community Forest Trust for Idaho. Of course, I know
Idaho, so that's what we looked at.
I think what we were looking for is the harvest could
happen anywhere, but we were going to share it with the entire
State of Idaho using the current SRS funding formula that we
have today.
However, in answer to your question, if we could create
some type of funding that would create a balance of what we
were going to get every year, I think we would really take a
serious look at that because last year we got $1.8 million. If
you go back historically, I should have been getting $3.5
million from what we did in harvest in early years. Are we
going to get back to that? No.
But I also want to say that when we were getting $3.5
million the counties in the U.S., in total, were getting over
$500 million. So that meant that the Forest Service was
creating $2 billion in revenue. They're not doing that today,
so it's being funded by taxpayers to help them.
We've got to find a balance there somewhere. And I think
we're willing to work for that and find something so we don't
have this deep hole and then we jump up every time it's
reauthorized for a year or two, and then we fall into that hole
again.
So, thank you for the question and I appreciate being able
to explain my thoughts on it.
Senator Cortez-Masto. Thank you.
Mr. Landis. Thank you for the question, Senator.
Being from Alaska we have a certain amount of experience
with trusts and permanent funds situations. I have actually
received a cash payment every year that the permanent fund in
Alaska has, just as a personal note, been in existence, and
that's been a very successful program.
I was intrigued by Mr. Haggerty's statistics of ``if we had
done this in 2000 what it would look like now.'' I think that
it all depends on the order of magnitude that you start with.
It's going to be a big number to start with, but I think it's
important to start with the right number rather than set up a
program that will fail.
Thank you.
Senator Cortez-Masto. Thank you. Thank you very much.
The Chairman. Thank you, Senator. And I appreciate that all
of you had a chance to answer because it is something that, I
think, if we are trying to look for some out-of-the-box
solutions, some of these concepts, whether it is what Idaho has
been doing or what you have mentioned, Mr. Haggerty, these are
worth considering. So getting that input is important.
Thank you for the question.
Senator Gardner.
Senator Gardner. Thank you, Madam Chair.
If anybody has a pocket knife, I think Senator Franken is
in need of a pocket knife, probably not an appropriate request
at a Committee hearing but just in case.
[Laughter.]
Thank you very much to the witnesses for your time and
testimony today and for holding this very timely hearing.
Obviously, it is one of the key issues that I hear about when I
go into Western Colorado and talk to county commissioners and
leaders of their communities about SRS/PILT dollars.
Whether you are in Hinsdale County, which has over 90
percent of the county in public lands, or whether you are in
Mesa County or Grand Junction that has over 70 percent in
public lands, these are issues that are on everyone's mind.
With so many county commissioners and officials in the
room, I would just ask you for your consideration of an effort
that I am leading on moving the BLM Headquarters to the Western
United States. This is an effort that I think is important. We
have around 9,000 BLM employees across the country, about 400
to 600, depending on how you count them, at the headquarters
here in Washington.
But unlike the Forest Service, where there are actually
East Coast forests within the system, of the nearly 250 million
acres in the BLM system, 99.9 percent of those acres are west
of the Mississippi River. And so, take a look at my bill and
perhaps we could get your support for the legislation as we try
to make those decisions based out of Washington, a little bit
less Washington and more representative of the communities and
the counties that you represent. So thanks for that.
Obviously this is an important Western-based Committee, and
I fully support reauthorization of SRS. I am co-sponsoring the
legislation, Mr. Whitney, that Senator Hatch will be
introducing tomorrow as it relates to the continuation of SRS.
It is our job to make sure that we do that, to make sure that
we fully fund PILT.
I have also been working with Senator Wyden and the ski
areas on fee retention. Mr. Casamassa, I would just ask you
this question. I am working with Senator Wyden and the ski
areas on fee retention and my intent is to ensure that SRS and
PILT payments are not impacted by fee retention in any
legislation we introduce, because that is an important
consideration to make sure that we can get both done without
hurting the other.
I can only imagine what the uncertainty that the counties
face each and every year would do to the Forest Service's
budget. It is uncertain, obviously, with fire borrowing and
some of those other issues that we face, but I can only imagine
if Congress had to fund its employees and staff based on a
provision of law that was not going to be there, maybe it would
be retroactively applied.
So how do we get this beyond the current fact today and
into a situation where we have a more permanent base of funding
for these two programs?
Mr. Casamassa. Well certainly, Senator, thank you for that
question.
You know, associated with the development of more of a four
season mountain resort on National Forest System land, the ski
areas have really expanded operations to the point where there
is almost as many people, as you are well aware in the State of
Colorado, that are visiting the national forests, particularly
the ski areas in the summertime, as they do in the winter.
Fee retention associated with those types of developments
is something that I'm aware of and certainly we haven't really
looked at the specifics of what is being proposed, but it is
something that would provide at least a basis for
administration and being responsive to the investments that are
now being placed on the national forest through those public/
private ventures in ski areas.
Senator Gardner. Thank you.
This past summer I had the opportunity to visit Blanca,
Colorado down in Costilla County which is in the southern part
of the state, and there was a new mill that was being built. It
was a private mill built to deal with, mostly, timber coming
from private lands.
It was an interesting philosophy, though, that the manager
of the mill said, that it was a mill that was there to sustain
the forest and not the forest there to sustain the mill. I
think that is something that we have to recognize that our
activities to manage the forests, even if it involves something
like a mill, are not there simply to destroy this incredible
resource, but to make sure that that incredible resource is
there for future generations to enjoy. That is what we know in
Colorado is certainly the case.
Mr. Casamassa, again, I spoke with the White River National
Forest Supervisor and District Ranger, who deals with
Colorado's incredible gems, and brought up the issue of the
area known as Hanging Lake. A beautiful hike on the east side
of Glenwood Canyon leads to a waterfall, a lake. More and more
people are enjoying it each and every year. Recently it was
vandalized, though, which was just an incredible shock to all
of us and a shameful act, and there have been some other issues
associated with the area. It has seen an 81 percent increase in
visitors from across the country just over the last three
years.
I know the Forest Service is going to be introducing or
releasing a new management plan to address some of the issues
that the area has seen with that 81 percent increase, but how
do we make sure that we are preserving some of these heavily
used national treasures? Are there things that we can do, other
mechanisms, other than shutting it down or cutting it off, that
could help us manage those and make sure that we prevent the
kinds of vandalism that we have seen over there and especially
to hold them accountable if they do occur?
Mr. Casamassa. Certainly Hanging Lake, it is a gem. It's
a--it was, at one point of time, a very limited known place.
You'd get there by parking at a rest stop along the interstate.
And now it's really being used as a trailhead for that
particular area.
So, you know, there is a balance between how we can operate
and maintain those facilities and then ensure that it is
protected and being able to be used for a wider variety of
folks. There is just a balance there to where you reach this
capacity where the resource is not sustainable given the use
that occurs. So, recognizing that that's one of the challenges
associated with more of an urbanization of some of the national
forests within the system.
Senator Gardner. Thank you.
Thanks, Madam Chair.
The Chairman. Thank you, Senator Gardner.
Senator Franken.
Senator Franken. Thank you, Madam Chair.
Yes, I am sorry, I was in the Judiciary Committee and I
have the feeling I may go over some territory that has been
covered.
In Minnesota, we have two beautiful national forests, the
Chippewa and the Superior. And we have a beautiful national
park up in Northern Minnesota, Voyageurs National Park. They
are beautiful and a great benefit to the entire state, but they
do add additional costs to the northern counties in terms of
coordinating emergency response and for search and rescue,
increased road maintenance demand, and that is why the SRS and
the PILT payments are so important to help defray the costs of
providing critical county services.
I know that has been a theme here, and I hear this from our
county commissioners every year. I want to thank the county
commissioners from various Western states for being here.
I just want to know, and if you have been asked this before
I got here, I apologize, but just how this uncertainty impacts
your ability to plan and how it affects your operations? Is
that something you have already answered and I should look at
the record or would anyone like to add on to what has been
said? Mr. Whitney?
Mr. Whitney. Thank you for that question, Senator Franken.
I can tell you now, I know that I speak on behalf of a
whole lot of county commissioners throughout this country,
there is nothing more frustrating than trying to create a
budget without certainty in revenues. And each year we go into
a budget doing that, not knowing whether PILT and SRS is going
to be funded. We would like to have some sort of certainty.
So, as I said, and I don't want to sound repetitious or
repentant, please support Senator Hatch's bill tomorrow to
fully fund SRS until we can get back to some sort of--
Senator Franken. Certainly.
So you would like some long-term solution to this?
Mr. Whitney. We do.
There are solutions here. And it's not about SRS and PILT
is not, I don't know if it is the solution. The solution is
active forest management and resource and mineral extraction on
BLM lands.
Senator Franken. Okay.
Mr. Whitney. That is the solution. We don't like to be
known as the welfare children of the West.
Senator Franken. To what extent does the Forest Service's
cost of fighting wildfires which are obviously more intense and
bigger than they have been and the fire season is longer. To
what extent does the money that is needed for that affect the
ability to manage the forests?
Yes, Mr. Cruickshank?
Mr. Cruickshank. Senator Franken, thank you for that
question.
Quite often when we see fire borrowing happening, a project
has been started and it's about to be implemented, but then the
fire borrowing takes the money away. And if that project
doesn't start within a certain amount of time, then it
basically changes it. It has to go back to page one and start
over again. So a lot of times those projects are shelved. They
might be there for four or five years and maybe they never get
implemented and we've already spent money to get them started
but because of the regulations, we have to go back.
And on your prior question, about funding. ``How do you
fund?'' I mean, you look at school teachers. They have no
certainty they're going to have a job. So, they're going to go
to the urban areas where they know they're going to have a job.
And so, we lose good teachers in our rural communities because
there's no certainty that they can be there.
Senator Franken. And we need them. We need them.
Mr. Cruickshank. Same way with buying equipment for a
county. You know, do we go buy a new piece of equipment or do
we spend $50,000 and fix the old one because you don't know if
you're going to get the money so, you can't spend $250,000 that
you don't have.
Senator Franken. I believe part of the solution to this may
be our approach, the approach to fix fire borrowing, because as
Mr. Whitney said ``if we can manage our forests well . . . '' I
know that in Minnesota we have had ceilings on how much we can
harvest because there is so much fire borrowing.
Thank you. Thank you, all.
The Chairman. Thank you, Senator Franken. I think one of
the great takeaways thus far from the hearing this morning has
been that so much of this is all intertwined, whether it is the
fire borrowing, whether it is forest management and then how we
deal with these economies.
Senator Franken. It is so unusual hearing in the Senate
that things are intertwined.
The Chairman. It is time to get something done here. That
is all.
Senator Franken. Yes.
The Chairman. Let's go to Senator Hoeven.
Senator Hoeven. Thank you, Madam Chairman.
I am going to actually start on the far end with Mr.
Whitney and then work back, all the way back. I want your top
several recommendations for how we can improve and strengthen
the PILT and SRS programs. Then I am going to ask Mr. Casamassa
and Ms. Barton Ferriter to respond.
I am guessing that Mr. Whitney you are going to start out
with long-term certainty in terms of your top recommendations,
but I would like your top, maybe, two, three, recommendations
from each of you and then get responses from people that
actually are out working with the PILT program, administering
it.
Mr. Whitney. Thank you for that question.
And I missed the gist of what you said, the--
Senator Hoeven. Improve. How do we improve and strengthen
the PILT program so that it works better for you?
Mr. Whitney. The PILT, did you say the PILT?
Senator Hoeven. Yes, Payment in Lieu of Taxes.
Mr. Whitney. Right, okay.
As I said, the way to improve PILT is to fully fund SRS.
PILT, we could certainly use more money; however, we understand
what the restraints on the budget, pitfalls you all have back
here, that you know, that it's got to be a balancing act of
some sort.
So, would we take more? Absolutely, we would love more. But
we'd just like to get what is rightfully ours that's mandated.
Senator Hoeven. So your main recommendation would be long-
term funding of SRS?
Mr. Whitney. Absolutely.
Senator Hoeven. Okay.
Mr. Haggerty?
Mr. Haggerty. I agree that long-term funding is required
but one of the problems we have in DC is the inability to get
appropriations passed in a timely manner, waiting for long
periods of time.
So, one of the--
Senator Hoeven. I am on the Appropriations Committee, so I
am well aware of that as well.
Mr. Haggerty. Yes.
One of the ideas that we have been offering as a solution
is to create a permanent funding source that isn't reliant just
on annual receipts which can be volatile and uncertain over
time due to markets and politics, frankly.
But to invest those receipts in a fund that would grow over
time, very much like a legacy fund that was established in
North Dakota for oil revenue in the last several years. And as
that trust builds it would make a distribution back to the
Treasury to pay for the long-term authorizations of SRS and
eventually, if it's successful enough, maybe PILT too.
Senator Hoeven. I appreciate you bringing up the legacy
funds, since it was established when I was Governor. So thanks
for bringing up that example.
Mr. Haggerty. Great.
Senator Hoeven. It is a great one.
Mr. Haggerty. Thank you for your good work.
[Laughter.]
Senator Hoeven. I appreciate it.
Mr. Manus?
Mr. Manus. Thank you for that question.
Long-term funding is necessary for PILT. It seems like
every year, every two years, we're struggling with our budgets
to figure out are we going to get PILT funding? If we don't get
PILT, how are we going to manage? Who are we going to lay off?
SRS funding is tied to management, and I think all the
timber counties would love to see a more aggressive management,
not only to prevent forest fires and make a healthier forest,
but it provides jobs in our community.
We're down to one sawmill in our community, and that
sawmill runs one shift currently, would love to be running two
shifts. Quite frankly, it doesn't pay for them to operate with
just one shift. And as a business owner, I understand that.
We need to get more harvest, we need to get better
management, we need a healthier forest, and we need the jobs.
With that, SRS funding would not need to be funded by the
Federal Government in our county because we'd get the 25
percent.
Senator Hoeven. Mr. Landis? Oops, you guys aren't in the
same order as my sheet is. I'm sorry.
Mr. Cruickshank?
Mr. Cruickshank. Thank you, Senator Hoeven, for the
question.
The PILT, actually the PILT formula, starts with a small
population of 5,000, and we have a lot of rural counties out
here that have smaller population than 5,000. So, a few years
ago, we talked about trying to find a little higher percentage
that would go to smaller populations with large land mass. It
would cost about $11 to $12 million in the PILT formula. That
would really help these small, rural counties.
But when you also look at the formula, we have some larger
urban areas of their land mass, they're getting, like, $2.50 an
acre. And you heard Mr. Whitney say he was getting around 70
cents an acre. In my county we get about 30 cents an acre.
So sometimes you have to look at how the formula is and I'm
scared to because then everybody puts their hand in the cookie
jar. So I'm going to be really cautious when I say that.
As far as SRS, the economic stability of when we had
sawmills and that steady paycheck was coming in, is correct.
But it also provided that education for our schoolchildren and
took care of our roads.
Litigation hampers us so the Equal Act for Justice Act
allows some people to sue and get their funding back where
counties are, kind of, left out, they can't get that. So, and
go back to the compact that was given to the states that have
large public lands through counties that with natural
resources, we would be better off with than counties that don't
have that.
I appreciate the question and thank you for considering
other options.
Senator Hoeven. Mr. Landis?
Mr. Landis. Thank you, Senator, for the question.
In Alaska, well in our part of Alaska, all of the land,
nearly all of the land, is owned by the Forest Service. So, we
don't have grazing. We don't have mining. We have forest.
That active forest management is important, allowing the
states to increase forest revenues through creative means.
We've heard some this morning about the state forests or forest
trusts, things that might be innovative, I think, are important
for us to look at.
And failing that, the second idea, of course, is long-term
funding streams, multi-year appropriations. We've heard about
endowments as well. Those types of things, again, creative
solutions for the problem, I think, are important.
Thank you.
Senator Hoeven. Okay.
I would ask Mr. Casamassa and Ms. Barton Ferriter, just to
respond in terms of some of those ideas. What is your reaction
to their recommendations?
Mr. Casamassa. Well certainly, Senator, I appreciate the
question. You know, one of the things that we would say is if
Secure Rural Schools was reauthorized that we would really take
a look at those ways to streamline, perhaps the Resource
Advisory Committee, the development of quorums and the ability
for recommendations to be made as it relates to the Title II
funding.
In addition to that, I'd say a part of what we continue to
work through and take advantage of are some other authorities
that we have like good neighbor authority, some of the Farm
bill, insect and disease designations and the streamlining that
we do as it relates to our analysis.
But continuing to work with the states, I think, is an
important aspect that goes beyond just Secure Rural Schools.
Senator Hoeven. Ms. Barton Ferriter?
Ms. Ferriter. I would agree with my colleague here. We
recognize the importance of these programs to rural America. We
will implement what the Congress authorizes and appropriates.
I will point out that we do operate PILT on an annual
basis, and so having a little more certainty about whether
we're talking about discretionary or mandatory or some kind of
combination of that would be helpful. It helps us in providing
more clarity for the counties on what's coming.
Senator Hoeven. Right. Okay, thank you.
I think that gives us something to work on.
Thanks to all of you.
Thank you, Madam Chairman.
The Chairman. Thank you, Senator Hoeven. I think that is a
good way to wrap things up as we consider a path forward.
I think one take away this morning is that members of this
Committee are clearly engaged. They clearly understand the
urgency that is in front of us to deal with Secure Rural
Schools payments to provide for that level of certainty, at
least in the short-term here.
We will look forward to the measure being released out of
the Finance Committee tomorrow under Senator Wyden's
leadership, along with Senator Hatch. I think that is
important.
But recognizing that we need to be looking to a longer-term
solution and to hear Senator Wyden's history with his
introduction initially of the program back in the 90's, but to
know that so many of us that have been here now for over a
decade and feel like it is just, kind of, Groundhog Day every
year with SRS.
These small communities, rural communities that don't have
a lot of extra money in their budget, scrape up money and cash
in air miles to send people thousands of miles away to
Washington, DC to go door-to-door, kind of, hat-in-hand
reminding us of the impact to these communities whether it is
your sports programs, whether it is your art programs, whether
it is what you need to do with your roads. This is very real in
terms of the impact to our small and rural communities.
The stress that you all go through as mayors, as
commissioners, on an annual basis because we cannot figure out
a longer-term and more sustainable and more certain approach,
is just not right.
Know that I think we have a collective desire to work with
you. I think we have heard some good ideas. I think it is
important that we be thinking outside the box because just
looking at this and saying well, we will reauthorize, we will
try to go a little bit longer than 18 months or maybe two
years. No, we cannot be thinking that way. And so, help us with
your ideas.
For those within the agencies, we need your help on this
too. This is not just kicking it to well, we did not get the
appropriation bills through and so, you put it at the feet of
Congress.
Justifiably, we need to get our act together as well, but
you have certain ideas in terms of how we can create some
greater efficiencies, perhaps looking at new aspects of the
program. This is something that rural America deserves to see
resolved and resolved in a positive way for our communities. So
I look forward to continuing this conversation with all of you.
And to those of you who have traveled so far to be here,
thank you for the time that you have given us.
We will keep working together.
Thanks and we stand adjourned.
[Whereupon, at 12:10 p.m. the hearing was adjourned.]
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