On June 30, hours before the state government shut down, three Minnesota loggers went before a judge in International Falls to sue the state for breach of contract regarding existing timber sales. The Minnesota DNR had ordered loggers to quit working on state timber sales for the duration of the shutdown. The loggers argued the DNR did not have legal authority to do so, because they’d already bought and paid for the timber under the terms of state contracts. The judge agreed, issuing a temporary restraining order against the state allowing all loggers to continue working on their state sales during the shutdown.
Wayne Brandt, executive director of the Minnesota Timber Producers Association, which worked with the loggers but was not part of the suit, explains that even though state foresters are furloughed during the shutdown and cannot monitor logging sites, sale contracts require loggers to follow forest management guidelines and best management practices intended to protect the environment. Sales will remain open until the shutdown ends and a state forester can visit the site, verify the timber harvest meets the terms of the contract and then “close out” the sale.
While the court decision was an important win for the logging community, Brandt says the timber industry remains concerned about the root cause of the shutdown–how politicians resolve state budget issues. Recently, Minnesota Forest Industries, a trade organization, has taken the unusual step of advertising online at sites such as MinnPost.com to direct people to its website, where it outlines how proposed budget cuts and changes to tax programs will reduce state and local tax revenues, restrict the timber supply and work against
sustainable forestry efforts. The organization urges people to contact their legislators to voice support for forestry.
When it comes to forest management, the Legislature appears to be lost in the woods. One of the budget bills vetoed by the Governor included $8 million in cuts to the DNR’s forest management programs. According to MFI, the budget cuts would have reduced the state’s timber sales by 170,000 cords per year, because forest managers would have neither the
staff nor resources to put the timber up for sale. MFI says reduced state timber sales would result in more than 1,100 lost jobs, $3.7 million in unrealized revenue to the state, and $11.2 million in unrealized state and local taxes.
Currently, the state supplies about 800,000 of the 2.7 million cords of wood harvested annually in Minnesota. While the recession reduced demand for Minnesota forest products and resulted in mill closures, the industry remains a substantial economic force–from logging to the production of paper, building materials and other wood products. MFI says the industry employs more than 40,000 Minnesotans and has an annual economic impact of more than $10 billion.
Other forestry issues threatened by the budget axe include the Sustainable Forest Incentive Act and the Payment In Lieu of Tax program. SFIA is a forest property tax program where landowners receive a taxable incentive payment in return for a long-term commitment to sustainable forestry. The SFIA is intended to keep Minnesota forests intact and in timber production by discouraging property subdivision and development. Hundreds of thousands of acres of corporate forest lands are enrolled in the program. While the SFIA has critics, including this columnist, most would agree the program should be improved rather than eliminated. According to MFI, eliminating the act would increase taxes for enrolled forestland
owners by $15.5 million annually, likely leading to the sale and conversion of forest lands and reducing long-term timber supply.
Payment In Lieu of Taxes, or PILT, is the mechanism used by the state to compensate counties for state-owned lands within their jurisdiction. In many northern counties, PILT payments are an important source of revenue. Brandt says not making PILT payments, as some in the Legislature have proposed, is akin to not paying your property taxes. For the timber industry, portions of PILT payments support county forestry programs. For taxpayers in rural counties, reducing or eliminating PILT means higher property taxes. And for the recreational users of state parks, forests and wildlife management areas, the PILT issue is part of an ongoing legislative assault against Outdoor Legacy land acquisitions and public lands.
While it may seem a contradiction in terms, what is good for the timber industry is good for Minnesota forest conservation. Our state is a leader in sustainable forest management, which includes third party certifications by the Forest Stewardship Council and Sustainable Forestry Initiative, voluntary harvest guidelines, and widespread cooperation between land managers, industry and the conservation community. That MFI is asking people to contact their legislators in support of forestry programs suggests at least some St. Paul decision-makers either don’t understand or don’t care about the state government’s vital role in forest management. Despite the polarized political climate, we can only hope our duly elected will find their way out of the woods on forestry issues.
