New gap appears in forest funding for rural schools


Issue Date: October 5, 2011
By Kate Campbell

Rural schools face renewed uncertainty about a key source of funding, as a program to replace depleted timber receipts from federal land has expired.

Known as the Secure Rural Schools and Community Self-Determination Act of 2000, the program expired Sept. 30 at the end of the federal fiscal year. It provided between 15 percent and 20 percent of operating revenue for California rural schools.

New legislation to address the problem is under discussion, but a bill has not yet been introduced in either house of Congress.

The $500 million funding program for rural schools and roads is designed to fill the financial gap created by a steep decline in timber receipts in forest counties, primarily in the West. With California timber harvests on federal land down more than 90 percent in the past 20 years, there are scant receipts to support rural schools.

Established more than a century ago, a county-federal partnership agreement recognized that federal land ownership deprives local counties and communities of tax revenue. In California, more than 45 percent of the land area is owned by the federal government. In Modoc and Trinity counties, federal ownership totals more than 75 percent; in Inyo County, it's 99 percent.

Traditionally, the partnership shared 25 percent of timber, mineral and grazing receipts from federal land. Counties say the payments are essentially sales and property tax payments that any property owner or business would owe.

But, by 2000, these revenues had plummeted to near zero as policies, regulations and lawsuits restricted much of the economic activity on national forest lands. At that time, enactment of the Secure Rural Schools Act helped address the lack of timber sales in 729 U.S. counties and provided stop-gap funding for public education in 42 states.

The House Subcommittee on National Parks, Forests and Public Lands held a second oversight hearing last week on draft legislation that could help shore up funding for education, roads and infrastructure in rural counties where the federal government is the largest landowner.

The House draft proposal has been named the "National Forest County Revenue, Schools and Jobs Act of 2011." Its supporters say it would address the problem of the expired Secure Rural Schools Act and lay the framework for a long-term solution by restoring forest management and timber harvest activities that would generate new receipts.

Meanwhile, President Obama's 2012 budget proposes a five-year extension of the Secure Rural Schools Act that continues funding, but offers no permanent solution for the decline in timber proceeds.

"It's good that a funding proposal is in the president's 2012 budget," said Modoc County cattle and hay producer Sean Curtis. "But the proposal doesn't fly. It drops support drastically by the third year and, if a state doesn't generate $10 million in receipts, it drops out of the program completely."

Beginning in 2012, if reauthorization does not occur, the historic 25 percent of payments formula would be recalculated on a seven-year rolling average. Based on the average through 2010, the entire distribution for all 729 counties would be an estimated $63 million, a drop of about $437 million from 2008 funding levels.

"This isn't funding that should go away," said Curtis, who is a Modoc County Farm Bureau director. "This is the federal government's payment of its property taxes. That's the purpose of the funds."

Curtis said there are similar programs that cover lost tax revenue administered by the U.S. departments of Interior and Defense. These reimbursement programs, however, don't have sunsets.

"The program for forest land is different," he explained. "It was designed to be self-funding through timber harvesting, mining activities and grazing, which have now essentially been shut down."

With the loss of activity on national forests and land managed by the Bureau of Land Management, it would take years to replace the infrastructure that has been dismantled in the past decade and needed to support harvest and production of lumber. And, at this point, forest managers say that even with new legislation there are no guarantees that fuels reduction and harvests would be allowed.

Jim French, superintendent of Trinity County schools, said there is one more disbursement due under the sunsetting Secure Rural Schools Act. That money should come in by year's end and will keep schools going for a while longer.

"We're hoping legislation will be in place by the end of the year," said French, who is president of the National Forest Counties and Schools Coalition.

More information about the issue is available from the Partnership for Rural America at www.partnershipforruralamerica.org.

(Kate Campbell is an assistant editor of Ag Alert. She may be contacted at kcampbell@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.