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» Timber billion: How can, or will, state pay?

HASSO HERING

A perspective from Oregon’s mid-Willamette Valley

Timber billion: How can, or will, state pay?

Written November 24th, 2019 by Hasso Hering

The Linn County Courthouse on a gray day last February.

In the timber lawsuit brought against the state by Linn County and many other rural taxing units, an Albany jury last week awarded the plaintiffs $1.1 billion. If the verdict stands up on appeal, how would the state pay?

The plaintiffs — 13 counties and 151 local taxing districts — convinced the jury that the state forestry board and department, under pressure from Governor Kitzhaber and others, violated their contractual obligation to produce as much timber from some 600,000 acres of formerly county-owned timberland as they could have produced under sustained-yield management that put timber production as the top priority.

The Oregon Department of Forestry this biennium has a budget of just under $389 million, of which $145 million is for fire protection. Clearly the damage award can’t come from the state forests or the agency that runs them.

The legislature would have to fund the verdict from other sources, and probably over many years.

Linn County Commissioner Roger Nyquist thinks lottery bonds offer a solution. “The state,” he wrote in an email, “will likely have $1.2 billion available in bonding capacity from lottery funds in the next five years. By internal policy they have bonded up to 25 percent of projected lottery revenue on all kinds of things over the years. Light rail in Portland would be one example.

“They are going to spend those funds somewhere, I would submit that disbursing the money to taxing districts in struggling timber communities is as good (a) use as any.”

Budgeting the proceeds of lottery bonds would need a decision by the legislature. It’s possible, but whether it’s likely is another question.

The counties get two-thirds of the proceeds of timber sales on the forests in question and distribute most of that to other local units of government. Their court case was based on the idea that a 1941 state law called for the forests to be managed for their greatest “value,” that this constituted a contract, that “value” meant revenue, and that the state changed its approach in 2001 to manage the lands for various environmental purposes in addition to timber production.

As much as I sympathize with rural counties, it’s hard to believe that the state government can’t change its forest-management practices as conditions — and politics — change over 60 or 70 years.

One of the principles I learned half a century ago in poli-sci is that counties and other units of local goverment are creatures of their respective states. They are not sovereign entities of their own. Oregon, through the legislature or the people via an initiative, could reorganize county lines or even abolish counties altogether.

So it seems unlikely that counties could collect damages from the state for changing forest management practices based on an unwritten contract, even if the change was unfair or even unjust. That’s why this verdict may not survive the legal gauntlet of appeals. (hh)



31 responses to “Timber billion: How can, or will, state pay?”

  1. Craigz says:

    It’s not their money anyway…it is our money. The City, County, State or even Federal Government…it is NOT their money…it is all ours. So your right pocket sues your left pocket and wins. Your left pocket pays your right pocket the settlement. All good right ? Heck no….it was all your money to start with. Besides…the State will likely appeal this for years. If they finally decide to pay up…well…maybe they will raise taxes or steal more of OUR kicker refund. More….of OUR money.

    • Gordon L. Shadle says:

      (leftist brain engaged)
      You are confused. It was never your money to begin with. All money, at all times, belongs to the government. Our dear leaders are nice enough to let you keep some it sometimes. But don’t fall into the trap that any of that money is ever yours. It is not. Only government can guarantee a just distribution of money, so government must claim it all as its own under threat of force or deprivation of liberty.
      (leftist brain disengaged)

  2. My Real Name John Hartman says:

    Hering is correct. The Timber Counties in Southern Oregon that refuse to realistically tax the properties of their residents, (thinking timber sales will save them) have as much chance of spending this award as ice roads forming in Hades. Pipe dreams rarely come true.

    One pipe dream that does stand a chance…The former timber-rich counties ought develop a strong infrastructure around cannabis. Southern Oregon already holds an esteemed reputation for quality weed. Why not look to the future rather than dwell in the past?

  3. LARRY MARTELL says:

    Chicken feed. The state blows more than that in a single year…..

  4. Al Nyman says:

    Gee Hasso. Why don’t you talk about the 8000 owed by every resident in the state to pay for Pers. The judge ruled there was a contract so what makes you say it was unwritten. Furthermore why don’t you talk about shooting Barred owls because the are decimating the Spotted owl. Who made the government God! They have allowed sea lions to become river lions because the dams create salmon pools for them to eat yet somehow the spotted owl is more important than salmon.

  5. Bob Zybach says:

    Hasso, your argument regarding state’s rights over counties’ might be accurate, but how about federal law? The arguments presented in the Linn County suit are nearly identical regarding ODF management of the Elliott State Forest — but with one glaring exception. The Elliott is Oregon’s first State Forest and the only one owned by the Common School Fund, and its management is under federal law, not state.

    It is telling that since the 1980s almost all of these failed and proposed forest management plans have been developed by a team of only six individuals at OSU. Whether “new forestry,” “structure-based management,” or, now, “spare and share” (or whatever they’re calling it), this cabal of inexperienced academics has somehow dominated forest management discussions and experiments in Oregon and the PNW since the Clinton Plan. All have failed. Every one. This suit identifies the root problem with these computer modeling efforts, and now they are trying to impose their failed vision on the Elliott.

    The excellent series by Alex Paul in the Democrat-Herald have expertly identified these problems and now, hopefully, taxpayers are becoming better informed as to the politics behind the mismanagement of our public forestlands the past 30 years. The Elliott offers wonderful opportunities for research, education, rural jobs, and school income, but the current OSU proposal does not. It’s past time to turn the cabal out to pasture and begin managing our public lands with common sense and experienced managers, rather than ivory tower computer print-outs. In my opinion.

  6. Rich Kellum says:

    The Jury agreed with the Counties that there was a contract, the counties GAVE hundreds of thousands of acres of land to the State, with the agreement that the state would manage it for them. The Jury agreed with the counties that the State broke the Contract. If the State wanted to change the Contract, they should have negotiated that change with the Counties and taxing districts instead of just trying to cram it down their throat.

  7. Rich Kellum says:

    Hasso, the contract is in fact written

  8. Fed up says:

    I seems I likely that the counties will collect. It seems highly likely that the lawyers will collect at the expense of the taxpayers!

  9. Anon says:

    Multiple Courts have ruled that it is in fact a contract. Multiple Courts have ruled that the State does not have sovereign immunity in contractual matters like the one in this case. If they did, any contract between the state and local government would be of no protection to local government and any local government would be crazy to enter into any contractual agreement with the State. Both the case law and the practical reality in this matter indicate your analysis is incorrect.

  10. Ean says:

    I didn’t think that there being a contract was in question. What I believe to be the issue is the interpretation of “greatest permenant value” or at least what that meant when the contract was entered into. Though I thought the state made a compelling case that 80 or more year rotations are more profitable. Perhaps in the future if the state harvests older timber stands they can forgo timber payments to the 13 counties, or sue them. Two things for certain, lots of money to be made if your a lawyer on this case and these counties better get busy developing economies not totally dependent on resource extraction. Hopefully voters will elect forward thinking representatives however in this day and age feel good nostalgia seems to get more votes.

    • Anon says:

      Ean,

      You must have missed the part where the agency director acknowledged they were breaching the contract during his testimony.

    • My Real Name John Hartman says:

      Agreed! The former so-called timber counties ought develop strong infrastructure around cannabis. Southern Oregon holds an esteemed reputation for reliably high quality weed.

      Given the paucity of vision demonstrated by Linn County elected officialdom, forward-leaning thinking seems a bridge too far.

      • Bob Zybach says:

        Do marbled murrelets, spotted owls, or coho use weed? If not, there might be some “critical habitat” problems. Irrigation, herbicides, and labor costs and availability pose additional problems. Trees grow great, require little care or maintenance, and used to be profitable. Plus, they are better for hunting, fishing, camping, hiking, wildlife, and backpacking than marijuana grows. You could look it up.

        • Ray Kopczynski says:

          While that may be true, the “good ole days” of timber harvesting are long gone – never to return. Folks are dreaming & living in the past if they believe so…

          • Bob Zybach says:

            Ray, I’m not sure what kind of “good old days” you have in mind, but they include the Tillamook Fires, Columbus Day Storm, and Mt. St. Helens. Most of the world lives in wooden houses and/or cooks and heats with wood and there are more people now than then. “Never to return” sounds like a pretty definite statement regarding an unknowable future, so I’m guessing this is a statement of faith or desired future rather than fact. There’s still plenty of agricultural land out there, so I’m not sure how or why marijuana grows will replace forests, however poorly managed they may be.

          • centrist says:

            RayK
            Absolutely. Over harvesting with no regard to replanting are significant contributors to this conversation.
            Before folks accuse me of being a tree-hugger, I’m a long-term paper-mill employee. Who knew that mills that were served by residual chips ( that were once just incinerated) would put saw logs to the chipper?
            I’m not a forestry expert, but I’ve learned to listen to folks who lived on the ground. Harvesting at a rate that exceeds growth-plus-replant depletes the harvest.
            Seems to me that the plaintiffs back the “cut and run” approach

  11. thomas cordier says:

    the real issue to be identified, HH : we cannot allow un-elected bureaucrats to manage anything without effective oversight. The forest service became infected with the ideology of saving “species of concern” to the extent of refusing to harvest timber. That was done w/o regard to the contract and w/o regard to impact on communities. Kudos to Mr. Nyquist for pushing back against onerous decisions by “The State”. I don’t know how it will turnout either; but jury of citizens said they don’t like current practices. I’m betting the State will refuse to change anything w/o new legislation. PS I attended much of the trial–never saw HH hence his comments

  12. Ean says:

    Has so, I was doing some additional reading and whether or not there was a contract is indeed up for debate. For some reason I had it in my head that the maximum permanent value language was part of the deed, which would indeed be a contract. That is not the case though, the language of the maximum permanent value comes from a legislative act. Oregonian has an article up detailing this a bit better. Sounds like the state treated the initial case as a basis to lay the groundwork to win on appeal. Sorry for my incorrect assumption above. Should be an interesting case to follow in the years ahead. Though still somewhat aggravating the amount of tax dollars that will go to attorneys.

  13. hj.anony1 says:

    Bottom line…if this is upheld. Who pays? Us, You. Me. Oregon taxpayers.

    Talk about wealth redistribution.

  14. thomas cordier says:

    to centrist—there you go again–there is no cut-and-run proposed.Tthe computer modelling proposed 279MBF which was not overcutting; but due to “species of concern” only 149MBF were harvested. The rules for managing forests placed harvesting at the bottom of forest goals. That unilateral change was the contract vilolation

    • centrist says:

      TC
      Tomayto, Tomahto
      Lived and worked among loggers for many a year. Falling old growth 100 years ago was difficult, but profitable. Replant? Blahhh.
      Later years, what was considered tough harvesting or “bastard growth” (read that as self planting) became fashionable.
      Replanting came in to vogue during my early work years.
      The point? The golden years of harvest took out 300+ year old stock with no replant.
      Nobody attempted replant for many a year.
      Hence “Cut and Run”

      • Bob Zybach says:

        Centrist, if you were using a real name I would provide a more detailed response to your rant. Bluntly, you have no idea what you are “talking” about. I can see why you use a pseudonym.

        • centrist says:

          BZ
          First, your tone and content confirm why I feel the need for a nom de plume.
          Second, my “rant” is based on stories told me by long-term logging/forestry families with roots dating to 1900. I have to stand by the collected wisdom of first-person reporters.

          • Bob Zybach says:

            Quite the rationale, “Centrist.” Because I use my real name — as in newspaper or magazine Letters to Editors — you can learn that I have an extensive history in forest management myself, and my family roots in Oregon go back to the 1820s. As an anonymous person you can make any claim you want and it will always sound like b.s., and for good reason.

  15. thomas cordier says:

    Now we see another timber victory–another judge fount the O&C lands are not meeting their contractual obligations–ie not cutting timber and that Obama’s land grab was unconstitutional.

    • ean says:

      The O&C lands were acquired by the government after the railroads failed to deliver on their promises. I know for a fact the governments owns those fee simple with no encumbrances. The federal government shared revenues with the local taxing districts through a legislative act and thus can stop sharing revenues through legislative act.

  16. Ray Kopczynski says:

    Bob Zybach –
    “Ray, I’m not sure what kind of “good old days” you have in mind, but they include the Tillamook Fires, Columbus Day Storm, and Mt. St. Helens.”

    I do include your fires, storms, etc. as being part of that too — but that’s not material to the discussion IMO. Yes- people live in wood houses and/or heat/cook. There’s ample wood being harvested for that. I’ve not heard of any wood-shortage for building material or heating/cooking. Re-read centrist’s accurate post for “good old days.”

    “‘Never to return” sounds like a pretty definite statement…'”

    It most definitely is on my part. Next you’ll be pining for wigwam burners to return… Posit a scenario when timber can be sustainably harvested in the volume from the “good old days.” Considering the future. I believe my position is every bit as accurate as your desired outcome. Until this winds its way through the courts, we’re all treading water. Be careful what you wish for!

    https://www.oregonlive.com/politics/2019/11/failing-forestry-with-1-billion-timber-lawsuit-not-all-14-counties-are-big-winners.html

    • Bob Zybach says:

      Ray: I think you are making too many assumptions. Not sure why you think I would pine for wigwam burners, for example. I think you have no idea what my personal “desired outcome” might be, as evidenced by your assumption of what I “might wish for.” I do agree with your statements regarding treading water and following court decisions, but I don’t think you understood my reference to natural events affecting “best-laid plans.”

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