Allegheny Defense Project ...working for the protection of the natural heritage of the Alleghenies...

Hellbender Journal Autumn 2002

County Payments Update:

Three out of Four Allegheny Counties Choose to Gamble, and Lose

An Opportunity for Counties to Select Guaranteed Payments Arises

By Rachel Martin

Probably the largest single reason given for opposition to ending commercial logging in the Allegheny National Forest is the alleged effect on the payments made by the Forest Service to the four counties in which the Allegheny lays.

The arrangement, known generally as the 25% Fund (the Forest Service pays 25% of all revenue from the national forest to the counties), was implemented in 1908 as a way to make up for the fact that local governments could not tax the federal land within their boundaries. Because commercial logging generally provides the vast majority of the funds paid out to local counties, efforts to curb logging in our national forests have often met with local opposition because of the resulting potential for decreased payments to counties.

The Allegheny Defense Project has, for the past six years, supported the National Forest Protection and Restoration Act, a bill introduced in the U.S. Congress, that would not only end the national forest timber sale program, but also provide guaranteed, steady payments to national forest counties. This legislation, however, is not expected to pass in the near future, and when logging is decreased as a result of lawsuits, or for any number of reasons, generally the county payments decrease.

In response to the county payments shortfalls as a result of nationwide decreases in the federal timber cut, Congress passed a bill in 2000 that allowed for a new county payment mechanism that would provide stable, guaranteed payments to counties regardless of the amount of timber cut off our national forests. This bill, the "Secure Rural Schools and Community Self-Determination Act", allows counties to receive 85% of the average of their three highest payment years for schools and roads, and 15% of that average for other county projects. The bill allows counties to choose whether to remain in the status quo 25% Fund or to opt for the new guaranteed payment system.

In most areas of the country, this was a no-brainer. The vast majority of counties saw the guaranteed payments as the wise fiscal choice, and opted into the system. In the Allegheny, however, things were a little different. Three of the four counties (Warren, McKean, and Elk) under the advisement of the pro-logging Allegheny Forest Alliance (AFA), a coalition of timber companies, townships, and school districts, chose the traditional 25% payment system. (Interestingly, the Allegheny Forest Alliance receives the majority of their funding from school districts and townships which pledge 5% of their 25% fund receipts to the coalition every year. The pledges from the school districts alone amounted to $150,000 in 1999 in AFA's coffers.) Forest County, the smallest of the four, chose the guaranteed payments.

The result? In 2001, for the first time in 25% Fund history, Forest County received a higher payment ($1,392,228) amount than any of the other three counties (Warren: $1,269,085, McKean: $1,168,498, and Elk: $965,551.) Despite the fact that the three counties that did not choose the guaranteed payments made a conscious choice to keep their school funding tied to timber extraction, the counties, and especially the Allegheny Forest Alliance, have been calling foul, attempting to persuade the media, the courts, and the public that the Allegheny Defense Project is responsible for the funding shortfall. While it is certainly extremely unfortunate that schools are forced to do with less, it is important to remember that the real responsibility for funding shortfalls lies squarely on the shoulders of the timber industry-beholden local politicians who chose to gamble on their communities' kids. Let's hope they don't make the same mistake later this year when they will have the option to choose the guaranteed payments.

Making a New Selection

Despite the poor rationale for their choice to go with the 25% payments system fate is prepared to deal Elk, McKean, and Warren Counties an opportunity to undo their damaging decisions. Under federal law, the original choice to elect into the 25% payment program was valid for only two fiscal years with the most recent applicable fiscal year expiring on September 30, 2002.

Elk, McKean, and Warren Counties will have an opportunity to elect into the guaranteed payment program sometime in 2003. Whatever decision these counties make will apply to all revenues received after October 1, 2002. In other words, if the counties elect in 2003 to switch from the 25% payment program into the guaranteed payment program they will not be effected by any fluctuations in revenue that occur after this past September.

This is an important opportunity for these counties. They had the opportunity to observe the success of Forest County in the guaranteed payments program and have no reason to continue compromising the fiscal viability of their communities. But this will only mean something if the counties put their interests before those of the timber industry,

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