It’s no secret that the economic recession of 2008 and the subsequent decline of the housing market chopped demand and timber prices.
Local, rural municipalities, comprised largely by Allegheny National Forest, are still feeling the squeeze financially as they rely on timber revenue allocations to balance in the budget in lieu of business and property tax revenues that cannot be generated on federal lands within their borders.
However, there may be grounds for optimism looking to the future with ANF timber harvests projected to rebound soon and over the next decade.
In covering recent municipal budget work for the coming new year, The Era talked to a Corydon Township supervisor who attributed budget woes to reduced timber revenue — 94 percent of the township is national forest. So, The Era reached out to ANF officials at the Allegheny National Forest to see how much is being cut and how that affects forest funds for local communities.
Ruth Sutton, ANF public affairs officer, provided an explanation. She said municipal supervisors are likely referencing the Allowable Sale Quantity (ASQ), which is the amount of timber that can be sustainably harvested on the forest annually. The ASQ is different from the forest’s annual target, which is what the ANF is funded to harvest, according to Sutton.
She related the ANF’s 2007 Forest Plan set an ASQ level of 54.1 million board feet per year for the life of the Forest Plan — before the economic downtown. In recent years, the ANF has been funded to cut between 33 to 35 million board feet and is not in violation of the Forest Plan by not achieving ASQ.
The ANF anticipates offering approximately 36 million in fiscal year 2016, which runs from Oct. 1, 2015 through Sept. 30, 2016. According to statistics provided by Sutton, the volume of timber offered on the ANF during fiscal year 2015 was 31.6 million board feet, selling for about $6 million. Roughly the same amount of timber brought in nearly triple that amount of money at approximately $18.5 million in 2007 — just before the housing market decline in 2008.
“The ANF has consistently met our timber goals, which has stabilized between 33-35 (million board feet) annually. However, the value of the timber has sharply declined in the last decade,” Sutton explained. “Like any commodity, prices fluctuate depending on demand. The recession and decline in construction are some of the factors that have led to the lower values.”
The amounts allocated to municipalities are determined by a formula based on the amount of timber sold, the value of the timber, the per capita income of the area and the choice of the overall county on how to receive funds, according to Sutton. She said McKean County elected to receive a share of the state’s 25-percent payment, based on a sliding scale from revenues from the previous seven years.
The Forest Service final payment summary report shows each of the four counties containing portions of the ANF received roughly half the amount of timber revenue in 2014 compared to 2010.
Five years ago, McKean County received more than $1 million in 2010 and in 2014 received about $513,000.; similarly, Elk County saw around $871,000 in 2010 and around $424,000 in 2014, according to the report.
Sutton said this drop in board feet and value timber sells for has affected the amount allocated to townships, which receive funds based on the number of national forest acres that lie within their county.
“Also, when Congress approved the two-year reauthorization of Secure Rural Schools Program in 2015, they retained the language to continue to decrease in the full funding amount currently provided,” she noted. “For example, for fiscal year 2014 would be 95 percent of the amount for fiscal year 2013, and the full funding amount for fiscal year 2015 would be a percent of the amount for FY 2014.”
About a quarter of the ANF’s timber sales will be offered as stewardship contracts, according to Sutton. Although timber revenues generated from stewardship sales are not included in the Secure Rural Schools Program, she said communities benefit from this program because local businesses are hired to replace culverts, build trails, etc.
“This provides employment opportunities for the communities,” Sutton said. “For fiscal year 2016, we are planning to offer 25 percent of the timber sales as stewardship contracts.
“This is a complex issue that affects every state in the nation,” she said. “However, Pennsylvania’s average payment per acre has been consistently the highest in the nation.”
In 2005, payments to states totaled $380,042,240; in 2014, they received $262,748,002. In 2005, Pennsylvania’s average payment per acre was $12.52 compared to the national average of $2; In 2014, Pennsylvania’s average per acre was $4.77 compared to $1.38 nationally, according to data provided by Sutton.
Looking forward, the ANF anticipates offering approximately 36 million board feet in fiscal year 2016, according to Sutton.
“Should Congress desire an increased amount of timber harvests from national forests, the ANF will strive to meet the assigned volume increase,” she said. “The ANF accepted additional harvest amounts for 2016 and anticipates similar increases in 2017 and 2018.
“The ANF has several projects in development that we are very excited about because they will benefit the health of the forest and produce timber,” Sutton added.
For example, the Forest Service plans to harvest 49 million board feet during the next 10 to 12 years in the Greater Stickney area of the ANF. This timber project will also help with wildlife habitat improvement, treatment of invasive plant species and recreation access, Sutton said.
Approximately 4,000 acres across the ANF Bradford District will be treated for Emerald Ash Borer and other insect and disease complexes, resulting in the harvest of around 70 million board feet over the next 10 years.
In an effort to regenerate declining stands of Allegheny hardwood, the Forest Service will carry out tree harvesting and reforestation activities as part of the Bradford Restoration Project, estimating removal of 93 million board feet in the 10 to 20 years after the project decision is signed, according to Sutton.
She said there are several other projects on the horizon that could help turn things around for local communities.
