U.S. Admits Logging Is Not a Money-Maker After All

After decades of Forest Service claims that logging operations turn a profit for taxpayers, the president’s economic aides have concluded the national forest harvests cost more money than they make.

The $234 million in logging subsidies identified in the annual report of the Council of Economic Advisers marks the first time an administration has formally accepted environmentalists’ claims that Forest Service accounting practices hide overall logging costs.

The Forest Service in its own annual report earlier this year said its commercial logging operations turned a $59-million profit for the fiscal year ending Sept. 30, 1995.

The White House report, however, concluded that during the same period, the service collected $616 million in timber receipts but spent more than $850 million on timber management, reforestation, logging roads, payments to states and other costs.

“Generally, U.S. Forest Service subsidizes timber extraction from public lands by collecting less in timber sale revenues than it spends on timber program costs,” said the White House report, which was sent to Congress last week.

“Current policies toward natural resource use are mainly rooted in past legislation intended to stimulate the economies of the West and encourage settlement of the region,” the report said. “These policies facilitate the development and exploitation of natural resources.”

Forest Service officials said Wednesday they are willing to subject their accounting practices to an independent audit.

The agency traditionally has excluded from its bottom line some road-building costs, as well as the 25% share of timber revenue it is required to give to states.

“This is the first time there has been a recognition of the significant subsidies in the timber program,” said Carolyn Alkire, an economist for the Wilderness Society, a conservation group.

The society projected in a report earlier this month that logging of national forests cost federal taxpayers $398 million more than the timber sales returned to the Treasury in 1995. It said the Forest Service failed to account for $200 million in road construction costs and $257 million in payments to counties.