After a month-long trial, after hearing more than 100 hours of testimony and reviewing hundreds of exhibits, some going back to the early 1900’s, the Linn County jury deliberated for only a few hours before returning with a verdict. The jury determined that the State had indeed breached a long-standing contract with the 13 plaintiff forest trust counties and awarded full damages of $1.065B.
Of the 15 Trust Counties, Clatsop County Commissioners opted out of the lawsuit, although the majority of their taxing districts decided to stay in and are entitled to $243M, and Judge Thomas McHill determined that Klamath County forests operate under a pre-2001 forest management plan and removed them from the lawsuit. This left 13 Counties and 151 taxing districts found to be harmed and eligible for compensation.
The 1941 Forest Acquisition Act created the idea of Greatest Permanent Value (GPV) to mean managing these forest trust lands to return timber revenue to the Counties, taxing districts, and the Oregon Dept. of Forestry (ODF). It was in 1998 that the Board of Forestry decided to change the definition of GPV, and for the last 20 years, timber revenue suffered while the State instead prioritized going far above the mandates of the Federal Endangered Species Act and directing funds to increasing recreational opportunities.
While these are admirable goals, these shortfalls over the last 20 years were being born entirely by the trust counties. What the jury found is that the trust counties have been shorted $1.065B to provide these additional services to all residents of Oregon and it is only fair that we be fairly compensated for these services. Over the last 20 years, trust counties have had to cut public safety, education, emergency services, road maintenance, healthcare, libraries, and other essential services.
When it comes to natural resource-based industries, Tillamook County is blessed with dynamic timber, dairy, and fishing opportunities. Some think that increasing timber harvest will harm the environment. As a Tillamook County Commissioner, I am proud to be able to say that when it comes to clean water, habitat restoration, and fish recovery…no Oregon County does these things better than Tillamook County.
Over the decades, our timber, dairy, and fishing partners have collaborated with our Tillamook County public works department, watershed councils, OR Watershed Enhancement Board, Tillamook Soil & Water Conservation, Tillamook Estuaries Partnership, Salmon SuperHwy, and others to provide continuing improvements to our watersheds.
We recently completed a 600+ acre, $11M habitat restoration project called Southern Flow Corridor. In Tillamook County, we have over 3500 culverts, which often, due to increased fish passage rules, need to be replaced with a bridge…which is an expensive proposition. This is one of the reasons we have a bridge for every 3 miles of roadway. A difficult environment for a small rural county, but a true success story in Oregon.
Our victory in Court does not mean we can or should diminish our commitment to our environmental responsibilities. As I explained above, Tillamook County is the State leader in clean water, habitat restoration, and fish recovery. ODF cannot disregard the Endangered Species Act, or Clean Water Act, but I feel this jury verdict clearly specifies that the State should not go above and beyond to the detriment of the trust counties.
Timber revenue is but one part of the economic and social sustainability of rural Oregon Counties. It must also be understood that jobs in the woods, mills, and truck transportation are some of our rural counties best paying, fully benefited jobs.
In the State of Oregon, the Total Private Sector Average Annual Wage is $52K. This same classification of jobs in Tillamook County is $37K. Yet, when you look at forest products industry (FPI) jobs in Tillamook County, we have Forestry and Logging at $55K, Wood Products Mfg at $59K, and Truck Transportation at $47.5K. These are family wage, fully benefited jobs. Tillamook County has 852 FPI jobs which adds over $43.5M to the Tillamook County economy.
In the State of Oregon, there are over 60,000 FPI jobs paying an average of $53.5K. This total FPI employment in Oregon adds more than $3.2B to the State economy. Every County in the State has some economic activity generated by the forest sector. Total wood product sales in Oregon exceeded $10.34B in 2016. The total number of wood processing facilities in Oregon was 360 in 1988 and was down to 172 in 2017. When looking at sawmills in Oregon, number have decreased by 53% during the period 1988 to 2017, down to 78 sawmills in 2017.
The jury award underestimates the real social cost which was caused by the State’s breach of contract. According to the State’s own figures, each additional million board feet of harvest results in 9.8 family wage jobs. 3.6B board feet of foregone harvest meant 3700 jobs lost. Imagine what those lost jobs would have meant to the trust counties, not only in terms of the productive lives of its residents but of the economic multiplier which would have attached to all the purchasing power those jobs would have resulted in.
It is important to note that interest at the State mandated rate of 9% accrues on this damages award which equates to $260K per day. It is expected that the State will appeal this verdict to the Oregon Court of Appeals and then possibly to the Oregon Supreme Court, taking years for these court decisions.
No one should blame the trust counties for this situation…had the State performed the contract as originally promised, the Counties would be in a much better financial condition and ODF would also have had the financial means to properly manage the State Forests. It is not right to expect rural Counties to shoulder the burden to benefit the entire State.
We in rural Oregon have a great story to tell when it comes to our magnificent forests and the sustainable forestry practices that bring so much to so many. It is unfortunate that the urban-rural divide is so poignant in Oregon. Most rural counties will never be the home of a Nike, or Intel, or Columbia Sportswear. Long before these companies came into existence, rural counties and their natural resource-based industries were the growth engines of Oregon. We can continue to be vibrant, sustainable, self-reliant, rural counties if given a level playing field, and our success will not come at the expense of the environment if we have reasonable harvest policies.