ARIZONA STATE LEGISLATURE
SENATE AD HOC TASK FORCE ON FOREST MANAGEMENT
Minutes of the Meeting
Thursday, August 28, 2008
9:30 a.m., Show Low Council Chambers
Members Present:
|
Senator Sylvia Allen, Chairman |
|
|
Senator Chuck Gray Senator Karen Johnson |
|
|
Gerald Flake David Tenney
Members Absent: Senator Amanda Aguirre Senator Marsha Arzberger
Staff: Jake Agron, Senate Assistant Analyst |
|
Opening Remarks of the Chair
Senator Sylvia Allen called the meeting to order and welcomed everyone to the discussion of “money.” She stated that the two Democratic Senators on the task force were at the Democratic National Convention and were excused. Senator Allen quoted John Adams as saying, “All the perplexities, confusion and distress in America arise not from defects in the Constitution but from ignorance of the human nature of coin, credit and circulation.” She stated that in the last five years, our state government has grown thirty-two percent while our country is living and functioning in debt. Senator Allen said that although these things were troubling, she believes in the American spirit and that one of the reasons for the hearing today, was to try to solve some of the deficit problem without raising taxes.
Senator Johnson said she did not understand how the State Legislature could spend money they do not have, although it has continued to do so anyway. She explained that we have been creating new programs when we do not have the money for them and said the State was in a real crisis.
Senator Chuck Gray remarked that the budget that is to be dealt with in January of 2009 will be two billion dollars short. He stated that it was very important to elect those people who are going to recognize the difference between money in the bank and credit. He said that people on every level needed to contribute to repairing the financial downside we are experiencing, from dog catchers to state senators and even in our own household with our checkbooks.
Gerald Flake said he received a notice that State sand fees had gone up very high and explained that doing so is no more than an increase in taxes.
David Tenney said he was interested in hearing ideas and alternatives to doing things the way they were done for the current budget passed by the Legislature. He stated that we can do better and we have to do better for the people of Arizona than borrowing, bonding and hocking our future generations rather than cutting something that needs to be cut now.
Presentation on State Budget Deficit
Dean Martin, Arizona State Treasurer, explained that the State Treasurer’s Office was the “bank” for Arizona and every dime collected by the State, no matter what the source, has to be deposited at the office of the State Treasurer. He explained that on the last business day of 2006, the State had 2.3 billion dollars left in the bank after all the other business was done and after all of the bills were paid for the year and received an extra 1.3 billion dollars in profit on the next business day because of investments.
Mr. Martin stated that his philosophy on investments is safety first, then liquidity and finally yield.
Mr. Martin remarked that in a recession, Arizona generally does not lose many jobs, but it does continue to have population growth, making the net a negative. He said Arizona has recently begun to lose many jobs and Arizona is currently experiencing one of the largest declines in construction jobs ever.
Mr. Martin said that housing permits in Arizona fell because of too much supply and not enough demand.
Mr. Martin noted that national consumer confidence was the second lowest in U.S. history and has not been this low since 1980. He explained that the national numbers on delinquencies, people behind on their mortgages, was the highest it has ever been.
Mr. Martin said that oil prices were currently having a negative effect on consumer confidence. He stated that high oil prices were due to the change in the value of the dollar because oil itself is priced in dollars. Mr. Martin added that the value of the dollar has dropped due to the housing crisis and in turn, Americans were paying for the housing crisis at the gas pumps.
Mr. Martin stated that the long term view of Arizona’s economy is good and that this deficit is nothing new to the State. He said that the first sign of recession is the crash phase, where all the news is bad and getting worse; then the first turn, where things are getting worse but not as fast a rate as before.
Mr. Martin noted that nationally, the bubble burst in housing as we entered the first turn of April 2008. He explained that in Arizona, housing was still in the crash phase and hopefully will enter the first turn in the first quarter of next year. He said that Arizona has to wait for the national housing to recover before its housing can do the same. He explained that the way to get out of all of this as a State is to stop “digging the hole deeper” and to stop adding new programs and benefits.
Senator Allen stated that we needed to send some propositions back to the voters, freeze spending and work together. She said she has faith and hope, that Arizona is very resilient and we can get our economy back and that Arizona has to change the way it does its budgeting process.
Mr. Tenney stated that he was amazed at the difference between information given today and what he had been told previously.
Mr. Martin said he was giving the task force facts that they can base their future decisions on. He explained that this recession was not that bad and that as a State, we have been through this before. Mr. Martin added that we need to focus on learning from those lessons and not repeating the same mistakes, and we could start by revising our Rainy Day Fund and the way it works.
Mr. Tenney said he is glad he lives in Arizona and knows we can fix this problem.
RECESS
Forest Revenues: Past, Present and Future
Senator Allen reconvened the meeting and stated that the presentation given by the State Treasurer was very informative and thanked the Mayor of Show Low for hosting the meeting. She stated that the next part of the meeting would be pertaining to the forest and water, specifically the amount of water Arizona is losing due to the over population of trees. She explained that in the summer of 2002, south of the Mogollon Rim, on the Apache-Sitgreaves National Forest, two separate wildfires started within days of each other and combined to form the most devastating and destructive forest fire in Arizona history. Senator Allen remarked that during a study it was found that this fire caused 75 million dollars worth of timber to be burned, and in addition cost $50 million to fight the fire. She said that $120 million in home value was lost to the fire. She remarked that this fire made one thing clear to policy makers, the status quo is unsustainable and we could not continue to leave the forest as it is, unthinned, unused and unmanageable. She said the situation must change if Arizona wants to avoid another catastrophic fire. Senator Allen explained that the purpose of this Committee was to determine what led us to this point, what is being done to manage the forest today and what needs to be done so that we can move forward.
Dr. Alex Thal, Western New Mexico University, stated his charge was to look at the impact of activities in the forest as well as federal, state and local policies and initiatives that affect local communities, businesses, counties and schools. Dr. Thal added he began doing this in the Gila and the Apache-Sitgreaves National Forests in the late 1990’s when they were facing a half-time reduction of their mills and over the next five years he did an impact study for all of the mills in Arizona, New Mexico and Utah.
Dr. Thal stated the unfortunate conclusion of the assessments that he did under the United States Forest Service contract, with Northern Arizona University and various other government and research institutions was to see mills close and the loss of jobs.
Dr. Thal added since the early 1990’s the mills were cut to half and were later cut substantially more and little pockets of communities were very hard pressed because those mills paid the higher end in wages.
Dr. Thal stated in the mid 1960’s the number one forest use was pleasure driving and today it is the same, only increased. However, Dr. Thal said that when the Endangered Species Act was adopted in the early 1970’s this region opted to invoke the interim guidelines on spotted owls which basically led to a reduction in forest use, particularly in timber. Dr. Thal added that future access to these national forests, investing in its use and conservation is still a worthwhile goal and this Committee should be commended for taking an interest because there are many things coming down from Washington that could shrink that pie even more.
Dr. Thal said when he looked at the Gila and other districts, they have been reduced in terms of the full multiple uses from one hundred percent to about eighteen percent due to such things as zoning and tribal management and when the Forest Service goes about looking at the impacts, they really need to factor that in.
Dr. Thal noted that environmental lawsuits have been winning on cumulative effects. The Forest Service, by way of the National Environmental Policy Act, is required to look at the effects on human dimension and the natural resources that we all depend on for aesthetic reasons and certainly for livelihoods. He explained that the purpose of the Multiple Use Act is to provide the greatest good for the greatest number of people. When initiatives are put into motion by various interest groups, that can affect that benefit for the greatest good because every time it is reduced from full multiple use to single multiple use the beneficiaries from those uses are reduced.
Dr. Thal stated that the structures in the economy in northeastern Arizona have changed over time and that has affected uses. Dr. Thal added there has been a false sense that one can no longer use and extract economic benefits from national forests, including the Apache-Sitgreaves, however, it really is not economically or socially caused, it is political.
Dr. Thal remarked that the forest revenues of the past were basically the benefit streams that flowed out of timber management and were managed not only for timber revenues for businesses but those benefits also came back in terms of forest restoration.
Dr. Thal added the money that comes from forest receipts, or what was called stumping speed, a substantial portion went back into that area for forest rehabilitation. Dr. Thal said that due to interest groups exercising their rights and the politicizing of the Endangered Species Act, the revenues that the federal, state, and counties could commit to reinvesting into sustainable communities and healthy forests were reduced.
Dr. Thal stated that in 1990, $4,201,756 was generated in forest receipts, mostly from timber. What this meant for the community was off of each use in the forest, for example, one hundred percent on a tree at one-hundred dollars, twenty-five dollars came back to the county’s schools and roads because those schools and roads provided the infrastructure for that national forest, for their staff, and the national beneficiaries of coming into the forest. In 2007, there was an eighty percent reduction in forest receipts to $869,514.
Dr. Thal noted that in 1990 there was $120,486 in recreation receipts and in 2007 that increased to $368,460, largely due to the increase in camping fees to offset the cost of infrastructure to the forest service. The 2007 receipts do not include campground fees collected on the Clifton Ranger District or the Black Mesa Ranger District.
Dr. Thal also noted that mining is really non-existent in the forest. In 1990 there was $662 in mining receipts and in 2007 there was $2,707. Dr. Thal said there are more regulations, however, on the Gila there was a great deal of geothermal exploration in the 1970’s and eventually it might go back to that but under current conditions mining is pretty much non-existent.
Dr. Thal said the big bread winner in this area and throughout the west is timber. In 1990 the timber production resulted in $3,794,177 and in 2007 it was reduced, for various reasons, to $136,719. Dr. Thal noted for the economies of the two state area of Arizona and New Mexico, the commodity uses, which was primarily timber, in 1990 generated $511,000,000 in sales and severance taxes. The industries generated $30,000,000 in property taxes which included timber, grazing, livestock production, and recreation. The wages from the multiple economic uses generated $263,000,000 in the region and in the early 1990’s these industries accounted for eighty percent of the bonding capacity for the region.
Dr. Thal stated the timber industry has gone through some significant structural changes since then due to the interim guidelines of the Mexican spotted owl and about a dozen to half dozen other endangered species.
Dr. Thal added in 1990 agriculture and grazing receipts generated $314,138 and $100,316 in 2007 and this is the same pattern that he has seen in Western New Mexico. Dr. Thal noted the two major factors which account for this reduction are market and regulations.
Dr. Thal said in looking at these industries, including timber, there is what is called a circulating dollar. For every dollar that is spent by timber, recreation, or livestock producer around the economy, that dollar circulates around.
Dr. Thal stated other receipts such as mass communication sites, utilities, land sales, and easements are growing and when forest receipts went down it had a severe impact from Washington to Arizona and New Mexico. At this time, Arizona and New Mexico combined to produce enough cut timber to provide homes for 36,000 people. Dr. Thal noted that 20,000 of those homes were in Arizona and in some ways it was a good idea to avoid using our own resources in favor of saving them but our country has more leverage on a global scale when we supply our own natural resources.
Restoration of Arizona’s Forests
Dr. Marty Moore, Research Associate, Western New Mexico University said in the 1880’s, scientists and naturalists came through Arizona and noted a great deal of open forest area, particularly in the Ponderosa pine. Dr. Moore added this part of the southwest has the largest span of Ponderosa pine in the world and this is Arizona’s main driver of the economic engine in the forest.
Dr. Moore noted in 1933 in an examination of areas that were “logged” it was noted that there were changes in the forest structure and vegetation composition.
Dr. Moore said by 1960 it was noted that there was a significant shift toward denser, less open tree stands and the scientific community began calling for forest restoration. These calls came from the local and national levels and resulted in new laws such as the Multiple Use Sustain Yield Act and the National Forest Management Act.
Dr. Moore added the initial concern was that timber and agriculture production were going to override any other type of thing that could happen in the forest and there was a call for a greater focus on recreation and waterways and more laws were passed such as the National Environmental Policy Act and the Endangered Species Act of 1973.
Dr. Moore further added in the 1970’s, 1980’s, and 1990’s, calls for restoration increased significantly, as professional foresters and researchers both recognized an emerging pattern of higher intensity catastrophic fire regimes.
Dr. Moore stated he made a presentation in 1995 to the Arizona Legislature specifically regarding fire conditions and he testified that if something was not done to get the forests back into good condition a large wildfire will threaten hundreds or thousands of homes and cause millions of dollars in catastrophic losses. There were efforts to move forward in relation to those kinds of things such as putting money into treating the interface areas and there were moderate successes, however, the Rodeo-Chediski fire occurred in 2002 and the threat is not over.
Dr. Moore said for a variety of reasons, largely centered on lawsuits and regulatory changes, a series of forest harvest and restoration activities designed to reduce fire fuel loads were either cancelled, delayed or reduced.
Dr. Moore added in an effort to break through this restoration roadblock, local governments, states, and agencies began partnering with private groups and organizations to reach “common ground” and move restoration demonstration projects forward. This was done in an effort to move both interface fire hazard and reduction and landscape restoration efforts forward.
Dr. Moore said in 2000 and 2001, state and county leaders worked together to press the federal government for a financial and professional commitment to restoring Arizona’s forests and this resulted in short term federal funding for fire hazard reduction and economic use of small diameter trees and biomass.
Dr. Moore noted there have been some modest successes, such as the Stewardship Contract which treats up to 100,000 acres, and potentially 150,000 acres, of forested land in a ten year period. Many of the individual projects under this contract are focused on fire hazard reduction near communities and developed areas of forest.
Dr. Moore further noted the idea of this contract was to jumpstart the economy in the area. Some businesses did benefit, however, the mainstay of the economy, which is timber, has not gone anywhere.
Dr. Moore stated there was two hundred million board feet plus of saw timber coming out of the three county area of Navajo, Apache, and Greenlee, however, when the spotted owl law was implemented in 1990 it was reduced to ninety-nine or one hundred million board feet and steadily decreased from there. This is a major concern in being able to drive the forest economy back to a healthy level.
Dr. Moore noted groundbreaking research being done in the Lincoln National Forest in New Mexico looked at whether or not saw timber harvest improves the health of the forest and the results showed that it does.
Dr. Moore said there are too many people in the forests to go back to the notion of letting the entire landscape burn. There are parts of the forest where that can happen but there needs to be active management in bringing the tree density levels down to an acceptable point to where we need to go economically and where we need to go in terms of the forest.
Dr. Moore added despite small pockets of success and localized efforts, landscape restoration of our forests continues to be underfunded and is not keeping pace with the continuing degradation of the forest. From a scientific standpoint, the forests are continuing to degrade and will continue to do so, whether slowly over time or burn by catastrophic fire.
Dr. Moore noted at some point in time national forest budgets will be consumed by fire fighting costs. Today, fire fighting costs now exceed sixty percent of the Forest Service budget as millions of acres burn each year. This hampers the efforts of our forest officials who are working on different types of projects to be able to get in and do what they need to do. There are economic action and development initiatives that were eliminated or severely cut back. Funding for interface fire thinnings based on high and extreme priority areas was severely cut back or eliminated. This has also hampered the state budget.
Dr. Moore stated in 1999-2000 the western governors, congressional caucuses, and state legislatures came up with a type of Marshall Plan for the western forests and went to the Congress and asked for $3 billion a year for ten years for forest restoration. Due to various factors there was a shift in budgetary priorities at the federal level and investment and commitment did not occur.
Dr. Moore said Travel Management and Forest Plan Revision processes are currently underway and these plans and revisions need to be structured in a way that promotes major landscape restoration.
Dr. Moore added research and monitoring at the local, state, and federal levels should be funded and coordinated to keep pace with travel management and forest plan revision efforts. In order to make progress you need to know what you have and if what you have done has improved what you had when you started.
Dr. Moore stated a unified, concerted commitment to restoring forest landscapes is needed to move beyond discussion or we will be left sitting here saying what if.
Dr. Moore noted results from a Northern Arizona University public perception study in north central Arizona showed that greater than sixty percent of those surveyed wanted the forest’s condition improved and restored. Over 76 percent surveyed approved of thinning and burning practices to bring the forest back and in addition wanted more than thinning and burning. Over eighty percent said they supported restoration for various reasons and fifty-five percent were not opposed to the cutting of large trees if it would lead to the restoration of the forests.
Dr. Moore concluded the public, in general, is not a roadblock for this issue but certain private interests are.
Senator Allen stated she has the desire to help support the Forest Service and would like to do away with the numerous regulations, lawsuits, and problems that confront them day in and day out and keep them from being able to go out and get on the ground and get the job done. Senator Allen added the government has created a regulatory Berlin Wall that is keeping us from being free.
Senator Gray asked Dr. Moore how much water is being lost in the local aquifers and across the state due to unhealthy forests and overgrowth.
Dr. Moore stated a study done back in 1994 on Ponderosa pine plots near Flagstaff estimated a thirty to thirty-three percent drop in surface water production. Dr. Moore added the issue does complicate itself because surface water and ground water are both impacted. The deep aquifers are not impacted as much, at least in the short term, as the shallow ground water aquifers.
Dr. Moore also cautioned when examining water losses in the forest to know what landscape size is being examined. From his research of gross research numbers on large watersheds of an entire river basin, it was very difficult to come up with any statistically significant information.
Dr. Moore stated the other part of this examination is not water loss but what the gains are going to be from restoration and some research has shown significant short term gains that leveled off as the remaining trees grew and became more robust.
Dr. Moore added it was noted that there was a thirty-three percent loss and drier and wetter years were factored into the equation and he believes there is an eight to ten percent improvement in watershed production for surface water but he does not know the numbers for the ground water. Dr. Moore added it requires a change in philosophy toward a constant and active management and maintenance of forest conditions and when you have that you will probably have a seventy to eighty percent confidence level to sustain those gains in water flow.
Senator Gray asked Dr. Moore what he believes the main obstacle is in being able to change that philosophy.
Dr. Moore stated it is a combination of many entities because while there are many regulations, there is no philosophical direction with a collection of different interests, some wanting one thing and some wanting another, which is tangling this process up.
Dr. Moore added while the public perception in the central part of northern Arizona has shifted in favor of restoration is significant, it is not the point where people are calling for action.
From a policy perspective, Dr. Moore stated the two major issues that need to be addressed are the different laws and regulations dealing with endangered, threatened, and sensitive species and the Clean Water Act. Dr. Moore added State guidelines are playing a large roll in the laws and regulations and the federal government is relying more on the State Game and Fish agencies to implement their directives.
Mr. Flake asked Dr. Moore if there is any scientific evidence that the passage of laws such as the National Environmental Policy Act (NEPA) and the Endangered Species Act has caused the explosion of undergrowth in the forest.
Dr. Moore stated there is scientific evidence that shows these processes have tied up forest management efforts. For example, the changes in fire policies at the national level has resulted in the overgrowth of more remote areas of the forests. Also, litigation has tied up forest restoration efforts.
Dr. Thal added he does not support the notion that any federal act caused the overgrowth because the overgrowth was well on its way in the early 1900’s. These acts and regulations that allowed for common lawsuits to challenge decisions exacerbate the problem.
Dr. Moore said the implementation of a number of policies and regulations are standing in the way of reversing the degrading forest conditions that we started to see in the 1950’s and the 1960’s.
Senator Johnson stated she does not understand why Arizona does not assert its State’s rights in these areas.
Dr. Moore said we can and it is a matter of collective political will. The bottom line from the scientific community is they do not care who does it but it needs to get done.
Economic Status of Arizona’s Ranchers
Charles “Doc” Lane, Executive Vice President, Arizona Cattle Growers Association, gave a brief presentation on the economic status of Arizona’s ranchers.
Mr. Lane stated people do not remember the basics because the money that has been talked about comes from harvesting, manipulating, and consuming natural resources.
Mr. Lane added we are talking about how to get tax dollars, used money, in order to restore that which produces new money for the nation and there is no nation that does not have a hold of natural resources that has any wealth.
Mr. Lane concluded every time natural resources are discussed, not to forget about the basics and remember that natural resources produce everything we need.
Senator Allen asked Mr. Lane how he is going to go out and mend fences, round up cows, and fix stock ponds if he is not going to be able to use any kind of motorized vehicle as a result of the travel management rule.
Mr. Lane stated if there is no access to the forest, you cannot do the things that need to be done in order to manage natural resources. Mr. Lane added in some cases ranchers have received exemptions from the roadless rule and in other cases they have not.
Mr. Flake stated he does not like off-road vehicles not for what they are but because of those who do not use them properly and the point of the travel management rule is not so much what it does to the forest, it is a matter of control. Mr. Flake added this is just one more step in getting us out of the forest, however, one of the rights that property owners still have to the land is the historic rights and they need to assert themselves so they can still use them.
Senator Allen said she and Supervisor Tenney have twice gone to Catalyst to see if there is anything that can be done to save the one hundred jobs that will be lost at the paper mill. Much of this has to do with the global market and the debt that America is in. Her goal is to figure out ways in her District to bring jobs back and help the economy and if we do not take control of our destiny and use the resources in our area and restore our forests and bring jobs back to our county it is going to be hard to live here.
There being no further business, the meeting was adjourned.
Respectfully submitted,
Jeff Turner
Committee Secretary
Bill Ritz
Committee Secretary
(Tapes and attachments on file in the Secretary of the Senate’s Office/Resource Center, Room 115.)
---------- DOCUMENT FOOTER ---------
Senate Ad Hoc Task Force
On Forest Management
August 28, 2008
Page 1
---------- DOCUMENT FOOTER ---------