*National forest counties and the federal compensation obligation: a moral analysis — Part 2

Editor’s note:  In Part 2, below, I examine the moral structure and implications of the longstanding revenue sharing relationship between the federal government and counties where national forests are located.  I reach what some readers may regard as an obvious conclusion, namely — that the revenue-sharing relationship established a legitimate, although frustrated, interest or stake for forested counties in the management of national forests.  Sometimes, I suppose, even the obvious deserves re-statement!    

The motivations that parties bring to a mutual arrangement certainly play a role in creating the moral expectations that arrangement harbors for the future.   Yet, motivations, and the variety of motivations that may be in play, do not alone define the features of a moral contract.  People may marry, for example, for all kinds of reasons – for security, because “it’s time,” or even for “all the right reasons.”  Yet the marriage contract itself harbors expectations embedded in law, custom, and religious tradition — that is, expectations more or less independent of the motivations that may have brought the marrying parties to the alter.

It is not at all difficult to imagine some of the reasons why members of the U.S. Congress in 1906 and 1908 chose the revenue sharing method over, say, direct compensation for lost property tax.  The property tax approach is fraught with obstacles. For one, property tax calculations vary from state to state and even county to county. The assessed valuation of forested property in private hands — the standard, presumably, against which federal compensation would have been gauged — may vary from place to place for a number of reasons.  Moreover, land values change over time, shifting property tax rates upward or downward.  Maintaining an adequate national database and the calculation machinery necessary for a property tax approach may have posed a daunting prospect in the pre-computer, first decade of the 20th century.  Beyond the matter of mechanical feasibility, moreover, a property-tax-based approach would have confronted Congress with the unhappy eventuality of making annual outlays from the federal treasury.  A revenue sharing approach, on the other hand – as members Congress might have readily appreciated – simply siphoned off a portion of federal revenue or income for forested counties — doubtless a far more appetizing prospect.    

Whatever the thinking behind Congress’s choice of it,  the revenue sharing arrangement harbored a tacit moral message to recipient counties. That message might be broadly rendered as follows:

We know your community has natural resources wealth residing in the forest lands we’ve taken over, and it does not seem entirely fair to us that we, the federal government, would simply deprive you of that wealth.  Therefore, and by way of compensating you for lost wealth, we’re going to share a quarter of the revenue from national forests with you from now on.

Some commentators have suggested that, over the long haul, forested counties have became “dependent” on these forest-related revenue shares.  “Dependent,” however is a loaded term, which may conjure up notions of habituation, addiction, and even helplessness.   Rural communities often have natural-resources based local economies.  Indeed, it’s hardly unusual for local economies of many kinds to depend on their surrounding environment’s characteristics.  Gloucester, Massachusetts’s fishing industry depends on open access to the ocean it looks out upon; Aspen, Colorado depends on its ski slopes; Napa, California on its rich wine-growing soil and climate; California’s Great Central Valley on its productive farmlands; Texas’s cattle on that state’s ranchlands; and so on.  It might be added that — obviously — human beings require air to breathe and water to drink.  But we don’t therefore characterize either of these essential needs as “dependencies.”  A natural-resources community’s relationship to its surrounding environment is arguably more like the human need for air and water than like the addictive allusion suggested by the use of the term “dependency.”

The selection of the revenue-sharing method has a number of important implications for both forested counties and the federal government.  In effect, the federal government has set itself up as the manager of a wealth-producing entity that delivers 75 percent of its revenue to federal coffers and 25 percent to county government and local institutions.  It may be noted that local populations depend on the U.S. Forest Service for considerably more than economic gain.  The Forest Service is also responsible for maintaining forest health, minimizing the risk of catastrophic wildfire, and fostering a local, forest-related economy beyond the 25 percent revenue share.  Yet, it may be said that the 25 percent revenue share, in its own right, arguably places forested counties in a situation not like that of a shareholder in a corporation.  After all, a 25 percent “share” of the Forest Service’s revenues may be said to “belong to” forested counties.

The parallel is not exact, but close enough — offering a kind of moral equivalency.  The 25 share inevitably creates an enduring interest on the parts of forested counties in how national forests are managed and their timber and wealth productivity — just as corporate shareholders have an interest in the management of the corporations they hold shares in. By extension, instances of mismanagement or gross mismanagement will provoke the ire of both forested counties and corporate shareholders.  The shareholder has a tangible stake in the corporation’s proper management and corporate leadership has a tangible responsibility to shareholders.  This same responsibility, I’m arguing, defines the chief moral link between counties with national forests and the federal government within their revenue-sharing relationship.  It bears noting that forested counties, as it happens, hold only nonvoting shares in their corporate relationship to the Forest Service.  Although federal regulations prescribe that the Forest Service cooperates with, listens to, and coordinates with county government regarding forest plans and management, the Forest Service in practice pays little more than lip service to this responsibility — as a number of recent posts to this blog have illustrated (e.g., this post).

Readers of this blog are well aware that timber harvests on national forests fell off sharply over the 1990s and have remained depressed ever since.  Within the limited framework of the “moral equivalency” argument I’ve suggested, this decline is like Ford deciding to curtail the production of cars, or Vizio the production of flatscreens, or Betty Crocker the production of cakemix.  When viewed from the vantage point of forested counties, the crucial question the historic decline in timber harvests raises is whether such a choice should be regarded, on the whole, as sound or unsound management on the part of the Forest Service.  That vast areas of national forest are now sorely in need of treatment (recent authoritative estimates say over 80 million acres are at risk), that forest stands are choked by overgrowth and too much forest fuel, and that a worsening trend in wildfire intensity and size haunt our national forests in the fire season suggest, of course, that the Forest Service is in fact not managing our national forests effectively. Robert H. Nelson’s recent essay, “Our Languishing Public Lands” (Policy Review, Feb. & Mar., 2012) lays out the case for this faulty management judgment more fully and more compellingly that can be done in this blog post.

All of which brings me to the chief conclusion and denouement of this post:  Namely, that the revenue-sharing method Congress selected more than a hundred years ago inevitably established and nourished a legitimate interest — indeed, a profound stake — on the parts of forested counties in the management of national forests.  That same interest, however, has been frustrated by the nonvoting status of county “corporate shares.”  That interest has also been gravely disappointed by the course of history over the past two or three decades, both in the Forest Service and in our national forests.  The decline of forest-related revenue, whether from a 25 percent share or SRS, combined with a collapse in the health, productivity, and fire-related wellbeing of our national forests has left the nation’s national forest counties with a surrounding natural environment they cannot effectively employ and — worse still — with forests that threaten local communities with catastrophic destruction.

Part 3 will explore yet another aspect of this moral geometry.


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One Response to *National forest counties and the federal compensation obligation: a moral analysis — Part 2

  1. Robin Stanley says:

    Another great article. Thank you Ron for another well done piece.

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