As of Wednesday, October 26, 2016
Uncoupling state timber sales revenue from public school construction funding doesn’t make sense. It is akin to killing the goose laying the golden eggs.
That idea came up during this year’s campaign for public lands commissioner. Democrat Hilary Franz, a Seattle environmental attorney, and Republican Steve McLaughlin, a retired Navy Commander, are the finalists.
Franz stated her position in a candidate questionnaire, according to the business publication, Lens. She wrote the state mandate to use revenue from timber sales on public lands to pay for school construction is “environmentally harmful” and “archaic.”
The current funding arrangement may be old-fashion, but it works well. One of the key reason is Washington has strong forest practices and environmental protections written into its laws.
Our state’s founders felt so strongly about adequately funding public education, they established the Common School Trust.
It encompasses more than 1.8 million acres and its purpose is to continue to offset school construction costs with money from log sales and shoreline and agriculture leases.
While other states have squandered their federally allocated lands, Washington has not. In fact, our elected officials wisely added trust lands beginning when Washington entered the Union in 1889.
The largest annexations occurred during the Great Depression, when the state took over the management of logged-over and abandoned lands. The state set up county trusts so counties where the lands are located had a funding source.
Today, proceeds from those trust lands not only help pay for public K-12 school construction, but fund our state colleges and universities, counties and prisons.
Even the $7 million used to complete our state capitol building in 1928 came from logging in Capitol Forest just west of Olympia.
“Compromising the health of our forests by not maintaining harvests on state trust lands would mean dramatic reductions in jobs and timber for Washington mills and rural communities,” Jim McEntire, former Clallam County Commissioner, recently wrote in the Seattle Times.
Washington is the nation’s second largest timber producer supporting 106,000 jobs and generating $5.2 billion in wages in rural communities.
In 1984, the Washington State Supreme Court (Skamania vs. State of Washington) reasserted the state Department of Natural Resources is obligated to follow the common law duties of a trustee which includes generating revenue, managing trust assets prudently and “... acting with undivided loyalty to the trust beneficiaries.”
As a practical matter, it is highly improbable the legislature would replace timber receipts with a higher business and occupation (gross receipts) tax on our state’s businesses or even enact a first-ever state capital gains tax, as Franz suggested.
The governor and lawmakers will continue to be hard pressed to scrape together the funding just to operate our public K-12 education system as directed by the Washington State Supreme Court under the McCleary decision.
The Court continues to fine the legislature $100,000 a day because it has not come up with the money it feels our schools need to comply with the law.
On Oct. 10, justices announced they will give the 2017 legislature an opportunity to address the issue before considering additional sanctions.
Making up $313 million in revenue coming from timber sales and aquatic leases is just not in the cards.
As a political matter, raising taxes has consequences.
For example, in 1981 when the GOP controlled Olympia, boosting taxes took a heavy toll in the 1984 elections. For Democrats, their 1993 tax hikes had repercussions in the 1994 general elections even though both parties “temporarily” increased them to balance the state budget.
Meanwhile, the Department of Natural Resources continues to fulfill its obligations which is to earn money for the trusts.
— Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business. He can be contacted at theBrunells@msn.com.