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5.6 Revenues and expenditures by State and Federal Governments for forest-based activities

5.6.1 State governments

State and local governments derive revenues from and make expenditures for both wood products and forest-based recreation and tourism. Expenditures include State budgets for forestry and park agencies and for visitor and tourism agencies, as well as grants or subsidies to specific industries or businesses designed to bolster economic development. Subsidies can include property tax or development fee waivers, infrastructure improvements or other incentives. These subsidies and grants are not usually focused on the forest-based sectors. In addition, the Federal Government may also provide subsidies through infrastructure improvements or development assistance.

Table 17 and Table 18 show the revenues and expenditures of the 13 State forestry agencies for 1998 obtained from the National Association of State Foresters. Florida, Georgia, and North Carolina have the largest State forestry agencies. Over 54 percent of the expenditures for all States are for fire management. About 7 percent of revenues are from the Federal government, the remainder are from State budgets and sales or permits.

State level expenditures in support of and revenue from forest-based recreation occur through both State park agencies and State travel and tourism agencies. Travel and tourism agencies, however, also deal with significant nonforest- recreation opportunities. Table 19 shows State park acres, expenditures and revenues for the state parks in the 13 Southern States (Thoreau Institute 1995). Florida has the largest percentage of land in State parks, while Kentucky and Tennessee have the largest numbers of visitors.

5.6.2 Federal government

The Federal Government contributes to the forest-based economy of the South, and hence to the general economy, through the management of federal land used for recreation, hunting and product removal. The harvest from national forests is discussed in more detail in the wood products section above.

Land managed by the four major Federal land management agencies constitutes 4.7 percent of southern land area (Table 20). Most of this land is managed by the USDA Forest Service (Vincent and others). This compares to the nearly 29 percent of total U.S. land area that is managed by these agencies. Arkansas, Virginia, and North Carolina have the largest percentage of Federal land among Southern States, while Texas, Oklahoma and Alabama have the smallest. Table 19 also shows acres of wilderness by agency and miles of wild, scenic and recreational rivers by agency. Wilderness represents over 10 percent of Federal land in the South, with most of the wilderness occurring in Florida, Virginia, North Carolina and Arkansas.

Timber is produced on forestland managed by the USDA Forest Service, the Bureau of Land Management, and the Fish and Wildlife Service. All four agencies contribute substantial recreation opportunities. Mining and oil and gas production occur on Federal lands in these States. Some of the land included in this table is not forested, such as coastal marshlands and grasslands managed by the agencies. Note also that these values are for the entire States of Texas and Oklahoma.

Management of public land also contributes to local economies through expenditures made by the agencies and through payroll for employees. For example, the USDA Forest Service contributed over $330 million to the Southern Region for management of the national forests, for research and development, for State and private forestry, and for payments to States. Revenues generated from activities on federal lands are shared with local governments through various regulations, including the 25 Percent Fund Act (P.L.60-136) and Payments in Lieu of Taxes (PILT)(P.L.94-565, P.L.97-258). In 1996, the USDA Forest Service, through the 25 percent fund, paid $22,709,317 to Southern States. This total does not include PILT payments or payments made through the Minerals Management Service, of the Department of the Interior.

Recently, these laws were amended by the Secure Rural Schools and Community Self Determination Act of 2000 (P.L. 106-393). Counties that have received payments previously are now eligible to collect either the traditional amount (usually 25 percent for Forest Service land) or an amount equal to the average of the three highest years' payments between 1986 and 1999. If the latter amount is requested (referred to as the "full payment"), the counties must use 80-85 percent of the total for traditional payments to support roads and schools. The percentage depends on the total amount received. The balance of the payment would be used for public land projects or county-level projects as determined by a resource advisory council in the local area. This new law will take effect for the fiscal year 2001 payments to States.