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The Changing Timber Industry Falling Fortunes Counties Face Prospect Of Losing Revenue As Timber Industry Shrinks

Sun., July 7, 1996

Timber sales put uniforms on the Kellogg High School band this year. Money from timber also put new desks in classrooms and a new roof on a middle school.

But if the timber industry continues its decline, the money used to buy new audiovisual equipment and other niceties may have to come from taxpayers - or students may simply do without.

The way counties make money from timber sales is complicated. The U.S. Forest Service sells timber from national forests in northeast Washington, North Idaho and Western Montana, and the counties where these forests lie take a 25 percent cut of the money.

Seventy percent of the local money goes for roads, the rest goes to schools.

For Kellogg’s school district, timber sale money is essential, said Terry Rinaldi, business manager for Shoshone School District No. 391.

With the Silver Valley’s property tax base eroded and its mining industry struggling, the district depends on the federal money for programs that other schools may take for granted.

“It’s really very important to us,” she said. “We use it to reduce our supplemental levies and for capital projects.”

With the timber industry in decline, the fallout could affect nearly everyone. For example, schools that rely on timber money for improvements either ask taxpayers for the money or hold off replacing uniforms and doing maintenance.

Ten Idaho counties received $9.3 million last year from timber sales, which have held steady or increased this decade while other areas in the Forest Service’s Northern District - covering land from the Dakotas to the Idaho Panhandle - have dropped.

Several Forest Service sales offered in 1995 had no takers. Many sales required logging by helicopters. While that’s less damaging to the environment, it also cuts into profits. Small timber companies can’t afford helicopter logging, so the trees often remain standing.

That doesn’t mean counties got less money. If the price of the trees sold goes up, timber sales are worth more, making fewer sales just as valuable.

For Colville School District 115 in northeast Washington, the timber money has dropped annually, to just $45,044 last year from $86,525 in 1991, said Karen Harris, an administrative assistant.

“For us, it’s just one of those things you put in the budget and pray you get it,” Harris said. “It’s not something that we can really rely on right now.”

Even if the Forest Service stopped selling timber, the counties would still get something from the federal government.

A complex repayment system would send a minimum amount to the counties, a sort of compromise to offset the federal exemption from local property taxes. So, even in the worst possible scenario, the counties would still have a small amount of dollars for schools and roads.

Of the Idaho Panhandle counties, Shoshone gets the most cash from the Forest Service.

Kellogg’s school district figures it’ll get $250,000 a year. “Some years we get as much as $500,000 out of the fund,” Rinaldi said. “We spent about $500,000 out of the fund this past year.”

For a district that spent about $9 million last year, that’s a sizable chunk. “We’d hate to see it go,” Rinaldi said.

The industry contributes more than school and road money. Sawmills and timber company property help counties with the taxes they pay.

However, as the industry diminishes in economic importance and the number of mills dwindles, so have their property tax payments.

Bonner County, for example, lost two mills in the Priest River area, the most recent being the Albeni Falls mill owned by Crown Pacific.

Bonner County Deputy Assessor Cary Vogel said that the mills account for somewhat less than $20 million of assessed property value.

The county’s worth about $2 billion, he said, making the mills’ loss less than 1 percent of the whole pie. Tax bills in Bonner County won’t move much at all from the loss of the mills.

“It’s not going to make much of a difference,” Vogel said. “In the past when the timber industry was a much bigger part of the economy out here, it may have.”

, DataTimes

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