Big Timber Elite Evade Paying $100s’ of Millions in Oregon Taxes Every Year Which Could Support Struggling Counties and Schools
In the Oregon 2013-2015 Tax Expenditure Report the Oregon Department of Revenue reveals that Oregon and counties will lose more than $285 million per year in tax revenues because of tax exemptions and reductions directed at the big timber elite (those who own more than 5,000 acres). See pages 259-260, and 320-324.
There are other tax exemptions given for logging roads (page 260) and logging equipment which we didn't include in the above $285 million figure.
Beginning in 1999 Democratic Governor Kitzhaber Grants Huge Tax Exemption to Oregon's Big Timber
In 1999 the Oregon Legislature and Governor Kitzhaber through House Bill 3575 granted timber companies and individuals across Oregon who own more than 5,000 acres of forest land an exemption to paying the timber harvest “privilege tax".
The resulting precipitous drop in $100s’ of millions of tax revenues collected by the Oregon Department of Revenue over the last 10 years can be viewed
Attached below. (Oregon Department of Revenue –Forest Products Taxes and Severance Taxes. 2008).
(Note: HB 3575 was phased in and fully implemented by 2004-05).
The Oregon Legislative Revenue Office wrote in Research Report #5-07 named "Oregon's Forestland Revenue -Impacts on State and Local Public Services", “The revenue loss associated with repealing the Privilege Tax and lowering the specially assessed values of forest land property is an estimated $70 million per year.”
In light of these indisputable facts of revenues lost to public schools and counties, Oregon citizens should demand that Governor Kitzhaber and the Oregon Legislature remove this unfair tax exemption granted to the wealthiest people of Oregon.
Further, these timber companies and wealthy individuals pay a miniscule amount of property taxes to each county. In Lane County for tax year 2006 the timber industry owned 47% of the private property yet they only paid 4% of the counties total property taxes.
More specifically in 2006 Property Taxes collected from private citizens amounted to approximately $54 million. Approximately $2 million was collected from large timber land owners (more than 5,000 acres).
(Source: Page 12 Oregon Legislative Revenue Office Report #5-07)
See the 2012 Oregon Taxes Report-Basic Facts and go to page 87 to see specific numbers and charts for timber taxes collected by the Oregon Department of Revenue up 2011.
The Timber Products Harvest Tax collected starting in 2000 are allocated to Oregon Department of Forestry, OSU, and Oregon Forest Resources Institute. None of these timber products harvest taxes go to counties or Oregon public schools. Go to this State of Oregon page here to see exact allocation.
To add insult to injury, these same timber companies and wealthy individuals are exporting as much as a billion board feet of raw logs from Oregon to Asia per year without any assessed taxes going to Oregon schools or counties. To address the resulting rampant destruction from this “gold rush” we will push for a state surtax on clear-cut and riparian logging.
We need not listen to the hollow rhetoric by timber industry pundits, politicians, and wealthy timber families that we must destroy our remaining publicly owned State Forests, BLM forests, and National Forests, as well as our waters in the name of raising revenues for Oregon’s public schools and counties.
Join us to demand that these wealthy tax dodgers pay their fair share to create a fair and just taxation system to support Oregon’s public schools and counties.
Make timberland owners pay fair share of taxes
(FYI. Titles for Guest Opinions are created by the editorial staff at the Register Guard and do not reflect the actual opinion of the authors.)
By Tim Hermach
For The Register-Guard
NOV. 18, 2014
In his Nov. 2 guest viewpoint (“Oregon needs more logging on federal lands”), Dick Rohl, former general manager of Swanson-Superior Forest Products in Noti, said that Roy Keene, who makes his living brokering private forestlands, doesn’t believe that timber harvests are important. Duh!
Keene expertly helps private forest owners get fair prices for their timber. As much as he knows about the real market value of forests and timber, it’s no wonder he doesn’t support more federal logging.
Subsidized federal road building and logging has been a bust for taxpayers from the beginning; it is still hugely in deficit. Why would any reasonable forest owners pay to have their best timber logged? That’s what we’re doing today.
You and I are also paying for roads we get locked out of, and for bureaucrats who are given expensive offices and big pensions while they sell our best timber to a few mega-mills at a net loss.
Corporate timber makes huge campaign contributions to our elected officials to keep this well-organized plunder going strong. They won’t relent until America’s remnant old forests, now concentrated in Oregon, have been stripped and replaced with comparatively worthless fire- and disease-prone plantations.
If Big Timber has its way, it will make billions more off our forests, and taxpayers will pick up the tab. Our children will inherit impoverished forests, and rural communities will remain their impoverished hostages.
Rohl’s concern for rural communities is as phony as industry’s concern for sustainable “forestry” (read “logging”).
Study the history of all the little towns that went bust after the timber industry ravaged the forest surrounding them. They lost more than mill jobs. They lost their fisheries, their big game and their aesthetic appeal. Every Oregonian who still believes in the timber industry’s phony concern for rural communities should read Oregon State University Professor Emeritus William Robbins’ “Hard Times in Paradise.”
As Keene documented, federal timber harvest volumes have more than doubled in Oregon since 2009 — yet there has been no notable increases in rural prosperity or wood-product manufacturing. How is that happening?
It’s partially because of increased mill automation, union busting and the relocation of secondary processing plants overseas. It’s also because federal timber is squandered by a few mega-mills, which have huge forest holdings of their own, where collusive bidding practices keep log prices down and profits up.
If, as Rohl says, we lack domestic logs to supply these mills and meet their finished product demands, it’s also because of rampant log exports
What about log exports, anyhow? Why do none of our political leaders even talk about log exports? There are, in spite of political and industrial denial, a plethora of loopholes that allow federal wood, in one form or another, to be exported. And at least half of Oregon’s private harvest being exported in one form or another.
Forests, watersheds, jobs, rural communities — all being sacrificed to foreign nations by Oregon’s leaders and their timber industry bosses to make more money and dodge more taxes.
Rohl writes, “Large private forest owners pay property taxes like everyone else.” That’s false. Forest owners don’t pay any taxes on the value of their standing timber, real property in Oregon. According to Oregon Department of Revenue, that costs the rest of us $300 million a year. On top of that, in 1999, owners of more than 5,000 forest acres were relieved of paying the timber harvest privilege tax. The revenue department shows this yearly loss at another $60 million.
Lane County’s largest landowner, Weyerhaeuser Co., an out-of-state corporation, pays a tiny fraction of the per dollar property tax we pay on our homes. And most of us don’t spray poison on our neighbors.
The county’s largest property owners get more property tax breaks, while the rest of us pay more. Meanwhile, we sell more of our best timber to them at a net loss while they blatantly ship out logs and jobs. How fair is this?
Rohl spoke of “small, family-owned timber mills.” Few, if any, remain, squeezed or bought out by mega-mills such as Seneca, where owners donated heavily to the tea party candidate who ran against Gov. John Kitzhaber.
If the big forest owners in the rural areas of Oregon paid their fair share of property and harvest taxes, rural tax districts and schools would get the benefits. If we kept our timber in Oregon instead of shipping it to overseas wood-product manufacturers, we’d have more jobs.
Finally, if we restricted political contributions, we’d restore our democratic government and Oregon’s forest issues would be fairly and honestly resolved.
Tim Hermach of Eugene is founder of the Native Forest Council.
Democratic Congressman DeFazio Ignores Oregon's Big Timber Tax Loopholes while Proposing to Privatize 1.5 million acres of BLM Lands.
Read Letter in Eugene Register Guard March 10, 2012.
"Big Timber has had too many tax breaks"
Eugene Register Guard Letter to the Editor Published on March 10, 2012
In his March 2 column (“Forestry bill is our best chance to save ourselves”), U.S. Rep. Peter DeFazio failed to mention that Oregon’s timber industry receives upwards of $300 million in state tax breaks each year.
Meanwhile, Oregon’s biggest timber companies are exporting as much as 1 billion board feet of raw logs to Asia each year — without paying a dime in taxes to support Oregon schools or county governments.
DeFazio chastised Lane County Commissioner Pete Sorenson and Lincoln County Commissioner Bill Hall for proposing to raise property taxes, but he failed to mention that in 1977, Gov. Bob Straub and the Oregon Legislature bequeathed the timber industry an exemption to paying taxes on the value of their standing timber.
The industry hasn’t paid taxes on private standing timber, valued at approximately $40 billion, since then. By 2003-05, that “standing timber tax exclusion” was valued at $511 million per biennium.
A timber harvest privilege tax was passed in 1977 that generated $30 million to $68 million per year in state tax revenues. But in 1999, even that modest harvest tax was deleted for timberland owners with holdings of more than 5,000 acres, thanks to Gov. John Kitzhaber and the Oregon Legislature through the passage of House Bill 3575.
Should we “trust” away more than 1 million acres of U.S. Bureau of Land Management forests, as DeFazio proposes, while ignoring the fact that Oregon’s timber elite have evaded paying billions of dollars in taxes that would have supported Oregon schools and counties since 1977?
Shannon Wilson
Eugene