Democrats Split on Charging Public or Timber Industry for Oregon’s Wildfire Protection

Democrats split on charging public or timber industry for more of Oregon’s wildfire protection

Lawmakers have offered varying proposals to boost funding for wildfire

By: – February 6, 2024
Clear-cutting on lands owned by Roseburg Forest Products near Veneta, Ore., November 11, 2023. (Rian Dundon/Oregon Capital Chronicle)

Clear-cutting on lands owned by Roseburg Forest Products near Veneta, Ore., November 11, 2023. (Rian Dundon/Oregon Capital Chronicle)

Democratic lawmakers are split over whether a greater share of the hundreds of millions of dollars needed to protect the state from wildfires should come from all Oregon taxpayers or from the private property and business owners whose valuable assets receive state protection.

During the five weeks of the Legislative session, Sen. Elizabeth Steiner, D-Portland and Rep. Paul Evans, D-Monmouth will both attempt to convince their peers to ask the public for more money, and Steiner also will propose reducing costs for the timber industry. Two of their colleagues – Sen. Jeff Golden, D-Ashland, and Rep. Paul Holvey, D-Eugene – will make the case that the timber industry has been allowed for too long to contribute too little and needs to step up to fill funding gaps.

At stake is not only the ability for state agencies to prevent and fight wildfires, but also widely needed resources for communities and homeowners hoping for help to pay for metal roofs and landscaping to stop fires from spreading. Property and community investments could one day help slow sky-high insurance premiums some Oregonians have been paying since the 2020 Labor Day fires became the state’s most expensive natural disaster in history.

In some parts of Oregon, companies are no longer renewing property insurance policies or writing new policies, according to Capital Chronicle interviews with homeowners and insurance brokers.

Among the two Democratic camps, collaboration on an omnibus wildfire bill to address these issues seems to be off the table since Senate and House leaders are not pushing for one.

“Wildfire funding is a real challenge,” Senate President Rob Wagner, D-Lake Oswego, told reporters at a news conference in the lead up to the session’s start. “I think I’m open to hearing from everyone on solutions.”

Division of payment

In 2021, in the wake of the Labor Day fires, the Legislature allocated a record $220 million to the Oregon Department of Forestry and the State Fire Marshal’s Office for wildfire preparedness. But two years later, lawmakers allocated just $87 million – less than half of what the agencies had previously received and far less than officials expected.

Costs for protecting the state from wildfire have traditionally been split fairly evenly between Oregon taxpayers via the state’s general fund, and timber and ranch landowners who pay per-acre fees to the forestry department for protection. But the state protects more private than public land.

Privately owned industrial forestlands make up about 33% of the 16 million acres that the forestry department protects from wildfire, according to Joy Krawczyk, a public information officer with the agency. Slightly less than one quarter of the land the department protects is public land.

Sara Duncan, a spokesperson for the Oregon Forest Industries Council, previously told the Capital Chronicle that timber companies operating in Oregon pay more, directly, for wildfire protection than in any other Western state because of the fees they pay per acre. But that doesn’t take into account other taxes paid by timber companies elsewhere that contribute to wildfire funding.

In Washington, for example, landowners pay directly for about 25% of the state’s wildfire protection, and much of the rest comes from the state’s general fund. Timber companies in Washington pay significantly more in property and harvest taxes to the state’s general fund than they do in Oregon.

In 2018, timber companies in Washington paid the state nearly $9 in taxes per acre of private forestland and $23.50 in taxes per million board feet of wood harvested. In Oregon, timber companies paid about $5 in taxes per acre of private forestland and about $12 per million board feet of wood, according to an analysis from the Legislative Revenue Office.

When Oregon allocated record wildfire funding in 2021, timber and ranch landowners didn’t have to pay significantly higher per-acre fees commiserate with rising fire costs, because taxpayers made up the difference. Legislators chose to lean heavily on the state’s general fund.

But today, more of the state’s general fund is needed to expand affordable housing, and address substance abuse and recovery, and youth mental health issues, lawmakers say. That puts ranch and timber landowners back on the hook for paying higher per-acre wildfire fees. For some, fees are up nearly 40%.

A tax on property

East Oregon ranch landowners expressed frustration this summer that their fees were rising to protect land far less valuable than the millions of acres of private forests owned by industrial timber companies west of the Cascades.

Steiner is focused on reducing those fees. This fall, she convened a workgroup to craft a proposal to reduce fees for both ranch and timber landowners across the state and charge every Oregon property owner $10 to bring in $20 million more annually for wildfire. Following reporting from the Capital Chronicle on the involvement of some of the nation’s largest timber companies in the proposal, and industry’s donations to Steiner’s campaign for treasurer, she dropped the $10 fee idea.

Along with bringing her proposal to cut the per-acre fees, she’ll back a proposal from Evans to refer a ballot measure to Oregon voters to create a new wildfire fee of 25 cents on every $1,000 of the assessed value of ana individual’s property.

Evans’ proposal, like Steiner’s earlier plan, is built on the premise that wildfires are a statewide problem and that everyone should contribute.

“It is effectively the fairest way to make sure that everybody in the state of Oregon is paying the same percentage or ratio or whatever you want to call it toward a shared outcome, which is a robust wildfire mitigation, preparedness and response plan,” Evans said.

The $125 million per year in expected new funding would be overseen by a new public safety authority. About 20% of the overall money would go to statewide wildfire priorities, and about 80% would go to regional priorities, Evans said, including training and hiring more certified fire fighters in rural areas and investments in home and community wildfire prevention and resilience.

He hopes this would not only make communities safer, but also help stem rising home insurance prices. When the state went from investing hundreds of millions of dollars in wildfires to less than $100 million, the part of the wildfire budget meant to help Oregonians harden their homes and neighborhoods was gutted. It went from $35 million in 2021 to $3 million in 2023.

The Capital Chronicle interviewed several homeowners and brokers about insurance rates. One homeowner in Ashland said her premium has more than doubled since 2021 – but she feels lucky she can still hang onto her policy at all. Brokers said some major companies are no longer insuring homeowners in places like Bend and Sisters where the wildfire risk is high. Lawmakers hope that increased state funds for wildfire prevention would eventually stabilize the market.

Evans said rising insurance rates are not just a rural Oregon problem, but that urban dwellers in major cities could see their premiums rise, too, if the state doesn’t make bigger investments in wildfire prevention for communities and homeowners.

“I can tell you because of the changing nature of the Western forests because of global climate change, there will be major fires in cities. This is an attempt to head some of that off,” Evans said.

Asking more from timber companies

Golden and Holvey want the timber industry to pay a greater share of wildfire funding in Oregon. Under their proposal, the Legislature would reinstate for the first time in more than 30 years a tax on the value of wood harvested from industrial timberlands – up to 6% for companies or individuals owning 5,000 or more acres. Holvey has attempted for years to get the Legislature to reinstate the timber severance tax.

Doing so could bring in tens of millions of dollars a year to state and local agencies to help pay for building code upgrades, home hardening and to protect landscapes from wildfires and boost community fire response capacity.

Golden said he would not ask Oregonians to pay more “unless, and until, we go to industry first.”

“Asking all Oregonians to pay even more for wildfire protection does not address the very large tax advantages that have been developed for companies whose lands ODF protects,” he said.

Those tax advantages have helped some of the nation’s and world’s largest timber companies keep billions on harvests that previously paid for public services in timber counties and in the state.

Reporting from the Oregonian, Oregon Public Broadcasting and ProPublica found counties lost at least $3 billion in revenue in the three decades since the timber severance tax was eliminated in Oregon in the early ’90s. On top of that, Measure 5 and Measure 50, both of which Oregon voters passed just a few years later, essentially limited the growth of property taxes in the state. The measures significantly lowered property tax burdens for timber landowners, who today pay taxes based on the assessed value of their forestland, not the real market value.

Additionally, some of the biggest timber companies in the world, which also own forestland in Oregon, are operated as private real estate investment trusts, or REITs, not as corporations. This means they typically do not pay state or federal income taxes or corporate income taxes. Among the biggest such trusts is Weyerhaeuser, which owns 1.6 million acres in Oregon.

Source: Democrats split on charging public or timber industry for more of Oregon’s wildfire protection – Oregon Capital Chronicle

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