August 5, 1997
Forest Service Roads Opened form Recreation Would Defray Costs
By Donald R. Leal
Not long ago, Congress flirted with the idea of making the timber industry pay for the roads it builds on national forests. The decision ended in a compromise, but the environmentalists and fiscal conservatives pushing for payment will be back. To them, roadbuilding on national forests is a case of corporate welfare. They claim that Forest Service's massive roadbuilding not only threatens precious wildlife and watersheds, but also explains why the U.S. treasury loses millions of dollars on many national forest timber sales. In their view, the solution is simple: Make the timber industry pay!
Unfortunately, they're trying to skin the wrong fat cat. Instead of making industry pay for roads, they should be removing the incentive that spurs massive, permanent roadbuilding in the first place.
Yes, logging companies are reimbursed for the costs they incur building roads on national forests, and the network is a big one--eight times the size of the interstate highway system. But the Forest Service, not the timber companies, owns the roads and determines the number and type of roads to build.
Roads are an investment that should generate income over time. For example, International Paper Company invests in roads on its 2.7 million acres of southern timber lands. It earns income long after logging has taken place by charging users for recreational access. If the Forest Service did the same, it would have a better idea of how many roads make economic sense. But the Forest Service chooses not to reap a return from its expensive road network.
The Forest Service has built so many roads because it makes budgetary sense. The agency's budget from Congress increases as more roads are built and more trees are logged--even if it loses money selling trees and building roads.
Consider a different scenario for managing government forests. Montana's state forests are multi-use forests that are required to generate income for public schools. A study by the Political Economy Research Center (PERC) in Bozeman, Montana, found that Montana state forests earned over $13 million in income selling timber over the 1988-1992 period. Over the same period, nearby national forests in Montana lost nearly $42 million selling timber.
State and national forests in Montana are located right next to one another, and silviculturists rate them as having similar timber-growing potential. Hence, they should have comparable revenues per 1000 board feet from timber sales. Their costs should be similar, too, since state foresters must carry out the same support duties as federal foresters, such as preparing environmental impact statements for timber sales. But the state has lower average unit costs and higher average unit revenues.
Lower costs do not mean sacrificing environmental protection. An independent audit team, which included representatives from environmental groups, rated Montana state foresters higher than the Forest Service in protecting watersheds from the impacts from logging in Montana.
The differences occur because state foresters sell higher-quality timber and invest in cheaper, temporary roads. The state's roads averaged about $5000 per mile in construction costs, while on nearby national forest lands in Montana, the Forest Service spends at least $50,000 per mile. The Forest Service's permanent roads are designed to remain after the logging is over to be used for recreational access. Hence they are more expensive to build.
Ironically, even though it builds temporary roads, the Montana state forest systems manages to earn money from recreation. In 1996, the state made over $300,000 for public schools through the sale of annual recreation permits on state forests. If the Forest Service had done the same on Gallatin National Forest in southwestern Montana, it could have erased most of its $2 million recreational deficit that year.
State forests must provide revenues for schools, and cannot dip into a bottomless trough to fund their programs like the Forest Service can. As a result, they keep costs low and they seek out revenues, including recreational revenues.
Reforming the Forest Service should not mean that someone else pays for roads. Instead, the Forest Service should follow the lead of state foresters in Montana and be required to generate income. This will do far more for the taxpayer than fighting over who pays for road construction.