Report Criticizes Industry Subsidies Breaks, Incentives, Exemptions Costing Taxpayers Billions, Encouraging Environmental Degradation, Group Says

Taxpayers would save billions of dollars and help the environment if the government stopped subsidizing logging, mining, grazing and hydropower in the Northwest, a research group said today.

“Subsidies promoting resource use are a major hidden force behind the ongoing degradation of natural systems in the Pacific Northwest,” the Northwest Environment Watch said in a new report.

“Publicly owned forests are overcut, our mountains leached with cyanide, our air polluted and our rivers dammed, dredged and drained - all at our expense,” the report said.

Critics say the report ignores jobs dependent on logging, mining and other natural resource industries.

“I’m always very suspicious of people that claim they see subsidies where there are none,” said Rep. Bob Dornan, R-Calif. “And I’m always suspicious when people are cavalier about jobs.”

Most of the subsidies go to large timber companies, aluminum producers and ranching operations through such mechanisms as tax breaks, the sale of natural resources below market prices and exemptions from environmental laws, said the non-profit research organization, which is linked to Washington-based Worldwatch Institute.

John C. Ryan, the report’s author, suggested corporations receiving the subsidies be subject to the same kind of “needs test” applied to welfare mothers seeking government assistance.

“Tremendous savings … could be realized if subsidies in these sectors were directed to people who actually require assistance to obtain housing or produce food, rather than to wealthy homeowners and large agricultural businesses.”

Subsidies often are masked in accounting prac tices, the group said. The U.S. Forest Service underestimates the total cost of logging national forests because it does not include the costs of excavating and grading logging roads, the report said.

With those costs included, logging of national forests in the Northwest cost taxpayers $91 million in 1993, the group said.

Timber companies enjoy generous tax breaks, the group said. For example, limited partnerships earning 90 percent of their income from timber, minerals, fertilizer or geothermal energy are exempt from paying corporate income taxes.

Government-subsidized dams and hydropower projects provide the region with cheap electricity while pushing many salmon species to the brink of extinction on the Columbia and Snake rivers, the group said. Prices for customers of the Bonneville Power Administration are still about half the national average.

BPA Vice President Steve Wright said the report ignored the reality of the electricity market in the Northwest.

“Subsidies assume that you could raise the prices. How can we raise prices when we are already losing customers at our existing prices?” he said about customers who are canceling BPA contracts for better deals elsewhere.

The study focused on Oregon, Washington, Idaho, southern Alaska, northern California, western Montana and British Columbia, an area with 14 million people and a $300 billion economy.

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