Forest Land near Washington's Merrill Lake
This stand of state trust land forest near Washington’s Merrill Lake will be logged by the state next year, providing about $1.5 million in revenue for school construction. Photo by The Pew Charitable Trusts

Just south of Washington’s State Capitol in Olympia, more than 20,000 acres of noble and Douglas fir trees blanket tall hillsides and valleys cut through by meandering streams. The sprawling, unmarked forest is indistinguishable from much of the Evergreen State’s rugged terrain.

This natural area, though, serves a very specific purpose. For the state, the land is essentially a bank account collecting interest, hundreds of millions of board-feet of timber, growing until it’s ready for harvest. The money collected when all that timber is sold — on a staggered basis, as different stands mature — will pay for school construction throughout the state.

Washington’s Department of Natural Resources manages about 3 million acres like these, known as state trust lands. These lands, about half of which are forested, were granted by the federal government when Washington became a state in 1889, set aside to provide a long-term revenue source for schools.

Another half-million acres of forest are managed by the agency on behalf of 330 rural counties and junior taxing districts such as libraries and fire districts. These governments turned land over to the state during the Great Depression, with the understanding that the state would return timber revenue to them. Many of these small governments rely on timber revenue to balance their budgets.

State trust lands have long been a part of the nation’s landscape, predominantly in 11 Western states — among them Colorado, Oregon and Wyoming. In total, they comprise more than 40 million acres, about the size of Florida. The system historically has provided revenue to schools and local communities.

But now, the trust lands arrangement across the West has come under attack from all sides: by environmentalists who want to preserve habitat for endangered species, by governments that may want to sell the land to balance budgets and by companies that want more access for logging, grazing and other uses.

In both Washington and Oregon, Endangered Species Act requirements have placed many acres of forest off-limits for logging, leading to dwindling revenue and frustration from the timber industry and many trust beneficiaries. The environmental community, meanwhile, thinks the species and habitat protections are far from adequate, and the long-standing funding model is outdated.

Waterfall near Washington's Merrill Lake
A waterfall runs through a stand of state trust land forest near Washington’s Merrill Lake.
Photo by The Pew Charitable Trusts

“The system we currently have really isn’t working for anyone,” said Lisa Remlinger, evergreen forests program director with the advocacy group Washington Environmental Council. “It isn’t working for rural communities, conservation or economic interests.”

The timber industry and many trust-dependent governments argue that the lands’ legal purpose is to provide funding for public services, and that the obligation needs to be met before states consider other uses for the lands.

“These forests were designed for [rural counties’] benefit, not for the benefit of the state as a whole,” said John DiLorenzo, the lead attorney for a group of rural Oregon counties currently embroiled in a legal battle with the state over harvest levels set by the Department of Forestry.

“If you’re going to change the rules and breach our contract,” he said, “write us a check and move on.”

In Wyoming, some lawmakers want to sell or lease trust lands to encourage development, a way to make up for declining fossil fuel revenue. Many in that state’s outdoors community fear the bill, sponsored by Speaker of the House Steve Harshman, a Republican, could end up putting prime hunting or fishing areas in private hands. An earlier version of the bill died in a Senate committee last year, and some opponents argue the state should not sell off assets for short-term profit.

study conducted by the Wilderness Society found that Utah sold off most of the 7.5 million acres of trust lands it was initially granted.

And Colorado has frustrated its outdoor community by keeping most of its trust lands off-limits to the public. The vast majority of the state’s trust lands are leased for agriculture and considered private, and the state has also leased some prime territory to exclusive private hunting clubs.

Gov. Jared Polis, a Democrat, has pledged to open more of the lands to the public, and last year Colorado opened half a million acres to seasonal hunting and fishing, doubling the previous amount.

Some states require permits to access trust lands, another way to generate revenue, noted Joel Webster, director of the Center for Western Lands, a project of the advocacy group Theodore Roosevelt Conservation Partnership. Although many states have seen conflicts over the role of trust lands, it’s “more pronounced” in the Northwest right now, he said, given the legal battles taking place over forestry.

“If people value conservation on these lands, they need to figure out how to get it done in a way that still supports the financial mandate of these lands to provide revenue,” Webster said. “You’ve got to be true to the intent of these lands, while at the same time acknowledging the conservation need.”

Dueling Lawsuits

In December, Washington finalized its plan to protect the marbled murrelet, a threatened seabird that flies inland to lay its egg in old-growth trees. The plan, which replaces an interim measure and is necessary for federal approval of future logging, reopens some lands for logging, while protecting other areas to provide a long-term habitat.

The state has been sued by the timber industry and rural governments that say the plan will further reduce their dwindling timber funding, as well as by environmental groups, which say the plan will not prevent the continued decline of the species.

The American Forest Resource Council, an Oregon-based timber industry group, is among the entities suing the state over its plan.

“[The state] has a very strong fiduciary trust mandate to the beneficiaries,” said Matt Comisky, the organization’s Washington state manager. “We think they actually gave more to the conservation side than what they were legally required to.”

On the environmental side, Peter Goldman, director and managing attorney at the Washington Forest Law Center, said his organization thinks the plan does not set aside enough habitat to protect the bird.

“[The timber industry] sued the state for doing too much,” Goldman said, “and we sued the state for not doing enough.”

A Fine Line

The Department of Natural Resources acknowledges it’s in a tough position. The state trust lands legally exist to provide money for public services, so the agency must bring in as much revenue as it can. As a result, the state aims to set aside the bare minimum habitat to comply with federal conservation standards.

“The tussle between the interests of the environmental community and the interests of rural communities and the timber industry and schools creates a tension,” said Angus Brodie, the agency’s deputy department supervisor for state uplands. “We have a duty to demonstrate that solutions are out there, and there is a place in the middle of that Venn diagram that we can operate.”

Perhaps no one feels that tension more than Chris Reykdal, the Washington state superintendent of public instruction. Reykdal voted in favor of the department’s plan as a member of the Board of Natural Resources. He called the plan the “right middle ground to strike now,” but one that still requires a long-term reconsideration of the funding model.

“We have got to figure out a long-term strategy for these trust lands to address forest health,” Reykdal said in an interview with Stateline, “but also provide revenue in a time where climate change is impacting what we can do.”

Trust lands’ share of statewide education funding is shrinking, Reykdal acknowledged. Washington’s school construction needs are about $1.3 billion per two-year budget cycle, he said, while trust lands provide only about $140 million over that time. The state spends about $15 billion every two years in K-12 education.

Brodie said the department’s new plan for the marbled murrelet is projected to financially harm 20 of the 330 local governments that get timber funding. The plan preserves roughly the same amount of acres as the state’s previous model, but it concentrates the previously fragmented conservation areas, meaning new land will be open to logging in some regions while trust areas will be set aside for conservation in others.

“The majority of the beneficiaries gained from this strategy,” Brodie said. “The ones that have been negatively impacted as a result of this, that is an issue, because they’re largely in rural and poor areas which have limited other tax base.”

Russ Pfeiffer-Hoyt serves as a school director in the Mount Baker School District, and he also chairs the Trust Lands Advisory Committee of the Washington State School Directors’ Association. In recent years, he said, his district has counted on as much as $1.5 million of its $28 million budget to come from state trust lands. While trust revenue makes up a much smaller share of school budgets than it did in the past, he argued that it still matters.

“The only way you could replace it under our current means of funding state programs would be through tax revenue,” Pfeiffer-Hoyt said. “By shifting tax revenue, you merely shift revenue away from another vital service.”

Late last year in Oregon, a jury ruled in favor of local governments that had sued over cutbacks in trust land logging and ordered Oregon to pay those entities $1.1 billion for the shortfall in timber revenue. The verdict establishes Oregon’s obligation to maximize logging revenue on the lands, giving the state’s Department of Forestry little wiggle room for other forms of management — and demonstrating the tight legal parameters in which states operate as they face increasing pressure to amend their trust land operations.

The agency says it plans to appeal the verdict and maintain its current “balanced” management model in the meantime.

No Easy Solutions

Both sides agree that sustainable forestry operations can be used as a revenue generator on some state lands. The amount of logging that both environmentalists and the timber industry would be OK with, though, seems irreconcilable.

“It’s not to say that folks managing the county budgets and looking out for the libraries and fire districts don’t care about the marbled murrelet, and vice versa,” said Kara Whittaker, senior scientist and policy analyst with the Washington Forest Law Center. “But we have opposing interests.”

That’s why many environmentalists say it’s time to find another way to fund schools and rural governments, while rethinking the role of trust lands. No clear model has yet emerged, but advocates say the onus is on lawmakers to provide new funding that eases the pressure on trust land revenue.

The Washington agency convened a group, the Solutions Table, that gathers all sides to look for ways to bring in important funding while minding environmental interests.

Meanwhile, the agency is analyzing income from all its trust lands to figure out which uses are most productive. The state brings in revenue from non-forested trust lands by leasing them for agriculture and grazing, commercial real estate, cell towers and renewable energy projects.

This story was originally published by Stateline, an initiative of The Pew Charitable Trusts.

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