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Reseeding Success: Shifting Economic Benefits of Timber Production Back into Communities

John Herrmann


  • Looks at timber as a key economic driver of growth and urban development of the Pacific Northwest.
  • Explores how the economic opportunities for rural communities that thrived in the golden age of timber have withered away.
  • Discusses how conservation and economic considerations should be balanced with the socioeconomic well-being of rural communities.
Reseeding Success: Shifting Economic Benefits of Timber Production Back into Communities
Ivan Strba via Getty Images

Since European colonization in the Pacific Northwest, timber has been a key economic driver of growth and urban development of the region. The national forests in the region became crucially important hubs of economic value and many communities cropped up to work the land and extract the plentiful resources of the forests. However, concerns began to mount over the toll timber was taking on the land through clearcutting and pollution, and suddenly the economic outlook for the entire region looked drastically different. In the three decades since the Northwest Forest Summit, the economic opportunities for rural communities that thrived in the golden age of timber have withered away, leaving many individuals and municipal governments dependent on federal assistance. Along with reduced opportunities for alternative development, subsequent policy choices have increased wealth inequality between industry actors and locals. In moving toward a new era of forest policy, conservation and economic considerations should be balanced with the socioeconomic well-being of rural communities.

As timber production waned and conservation concerns were inflamed throughout 1980s and 1990s, the enactment of the Northwest Forest Plan (NFP) in 1994 marked a massive shift in federal forest management in the Pacific Northwest. From a management perspective, the NFP established new land use allocations that limited timber activities in ecologically important areas and created mitigation schemes for protecting fish and wildlife. These management priorities were a sea change for the economic development prospects of much of the region, and because the timber volume prior to the plan was economically and ecologically unsustainable, even the lofty goal of 1.2 billion board feet a year was insufficient to support timber-dependent communities that had seen annual peaks of 14 billion board feet just years earlier.

The Northwest Economic Adjustment Initiative (NEAI) was intended to be the economic prong of the NFP meant to ease the stress of reduced timber harvest by transitioning communities to new sources of economic growth. The goal of the initiative was to create region-specific and tailored solutions for those most affected by the NFP through job retraining and economic action programs. The NEAI aimed to achieve its objectives by bridging the communications gap between federal, regional, state, and tribal interests through Community Economic Revitalization Teams (CERTs) that were intended to be adaptive mechanisms for identifying where federal investments should be focused. While there were successes for building community infrastructure with NEAI dollars, the program never gained much traction and was eventually discontinued in the early 2000s by the Bush administration.

The next attempt to solve the economic problems caused by the timber transition came in the form of the Secure Rural Schools and Community Self-Determination Act (SRS) in 2000. Long before the Northwest Forest Plan, the federal government shared half of timber sale receipts directly with counties to account for the revenue shortfall caused by untaxable federal lands within county boundaries (otherwise known as payments-in-lieu of taxes, or PILT). These payments were used by counties and municipal governments to improve infrastructure and fund social services like schools, fire departments, and police departments. Acknowledging the drastic decrease in revenue going to counties under the PILT program due to less timber sales on public lands, the federal government created a payment formula to compensate counties at a level comparable to the projected timber receipts.

Although SRS was only intended to last until 2006, it has subsequently been reauthorized through 2023, but its political and temporary nature leaves municipalities in limbo about future infrastructure funding. While the Infrastructure Investment and Jobs Act of 2021 (IIJA) extended the authorization of SRS and made investments in rural broadband internet, any lapse in the program would revert counties to a PILT timber receipt sharing model, leaving communities heavily invested in a declining timber output.

However, permanent dependence on SRS payments was never the intention of the program, but it was fostered by policy choices made at the state and federal levels. During the 1980s, timber was a stable investment, and the subsequent scarcity caused by the conservation of public lands in the 1990s increased the value of private forestlands as an economic asset, leading to more private investment groups getting involved in ownership of industrial forests. Taking advantage of the difference between corporate and investment schemes, some industrial wood products companies became real estate investment trusts, exchanging their 35 percent federal corporate tax rate for 15 percent capital gains taxes. Especially in Oregon, where lawmakers eliminated severance taxes on timber cuts on private forestlands in 1999 (resulting in an estimated loss of $3 billion for counties), choices to prioritize tax breaks for corporations have come at the expense of the rural workers who do not have jobs due to the consolidation of large timber companies and the automation of logging. Under the guise of encouraging industry and economic development, these policy choices have shifted the tax burden from wealthy corporations to individuals, making small landowners pay tax rates over 100 times higher than their timbering neighbors.

Ultimately, the failure of high-level government stakeholders to ensure inclusion of rural communities in the economic transition of the late 1990s has left these communities struggling for new opportunities and dependent on a downsized timber industry. While some programs have created jobs in recreation, tourism, and other industries, recent analysis of economic trends indicate that more jobs in rural areas are requiring higher education (33 percent of job postings) while residents maintain lower levels of bachelor’s degrees (21 percent of residents). In developing new forest policy, decisions should reflect the past three decades of experience by improving collaboration with economically depressed communities and investing in community initiatives that return community members to work in the forests.

An example of a successful movement to revitalize a rural economy can be seen on the edges of the Tongass National Forest where the Biden administration has launched the Southeast Alaska Sustainability Strategy (SASS), committing $25 million to building infrastructure, community capacity, and investing in tribal interests. The strategy comes from a similar vacuum resulting from conservation concerns as in the Pacific Northwest, where the local Alaskan economy had stalled and exacerbated economic inequality due to the Roadless Rule in the largest national forest in the country. The SASS is innovative for its emphasis on tribal sovereignty and fulfilling trust responsibilities to the Indigenous people in the region through economic investment in tribal natural resources and cultural projects. While the strategy has only been in place since 2021, it has made substantial investments in restoration, recreation, and forest resilience projects, initially identifying long-term projects to build new opportunities for tourism and jobs in the forest that are not industrial timber. Investments include funding watershed restoration nonprofits that run job training workshops and projects for improving subsistence foraging and food security for the local community. The key aspects of this program can be implemented elsewhere including sovereign-to-sovereign agreements for co-management of trust lands, focused collaboration that prioritizes the needs of the region-specific community, and direct investment in ecology-based programs that engage the local workforce before bringing in outside workers. 

From an implementation standpoint, there are statutory reforms that can be made to provide rural communities with the funding and tools needed to develop economic independence and self-sufficiency. Headwaters Economics has proposed a change to the Secure Rural Schools program that would reauthorize the program to transition off the annual appropriations model to a trust format. In this proposed reform, counties would become beneficiaries of a trust capitalized by the federal government and would provide increasing returns based on the initial contributions made by Congress. As Headwaters articulates, this trust would enable local governments to adequately plan based on stable revenues not subject to the appropriations process and allow them to choose their own ventures in which to invest. However, as seen with the Oregon experience, it would be important for community leaders charged with spending trust dollars to advocate for long-term economic well-being instead of short-term tax relief to retain the investments.

When planning for future forest policy, it is crucial that policy makers create mechanisms like the SASS or SRS that provide economic opportunities to the communities most directly impacted by their conservation decisions. While no plan can incorporate every stakeholder’s view for what is best for a community, it is crucial to include the most vulnerable groups through a robust public involvement process that puts locals to work in the very ecosystems that we seek to protect and restore.