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Forest Service Roads Opened for Recreation Would Defray Costs

Sacramento Bee
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

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

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.

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