The Best-Laid Plans. Randal O'Toole

net economic values, some of the most important data in FORPLAN related to timber prices. To verify these data, I reviewed reports for all timber sales sold by individual forests in the years before my visits. The Forest Service sold timber in auctions, and the bidding was often vigorous. Timber sale reports included the Forest Service’s appraisal, which was used to set a minimum bid, as well as the actual bids made by the various purchasers.

      The timber sale reports also revealed something I had not known, which was that the Forest Service was allowed to keep some of the receipts from the timber it sold. Each timber sale report had an entry with the cryptic title of Plan’d SAB Col, which stood for planned sale area betterment collection. This represented the portion of the timber sale’s receipts that the Forest Service expected to keep.

      A 1930 law known as the Knutson-Vandenberg Act allowed the Forest Service to keep an unspecified (and therefore unlimited) share of timber receipts for reforestation. The 1976 National Forest Management Act expanded the purposes for which these funds could be used to include wildlife habitat improvements, recreation facilities, or any other “sale area improvements.” This law greatly shaped the Forest Service’s view of the world and how it designed timber sales, because certain designs allowed it to keep more money while others allowed more money to go back to the U.S. Treasury.

      In essence, the Knutson-Vandenberg Act encouraged the Forest Service to use timber sales as a fundraising tool for all sorts of forest activities. Would you like to improve wildlife habitat? Plan a timber sale. Want to build a hiking trail? Design another timber sale. Need to repair some of the watershed damage done by past timber sales? Sell more timber.

      Detailed K-V documents written for each sale revealed something else: Although the law allowed the Forest Service to spend K-V funds only in the timber sale areas (defined by the Forest Service to include any area within a quarter mile of a cutting unit), the Forest Service actually kept a significant share of K-V funds as “administrative overhead.” After each K-V dollar was spent on the ground, the Washington office of the Forest Service received 4 cents; the regional offices kept about a dime; and the national forest offices kept anywhere from 20 to 50 cents. The result was that about a third of K-V money was actually spent on overhead.

      The bureaucracy’s dependence on K-V overhead funds explained Cherry DuLaney’s fake forests. DuLaney did her survey in 1984. In the early 1980s, the timber industry was suffering from a severe recession and was cutting very little national forest timber. This meant there were few opportunities for reforestation, herbicide spraying, or other activities funded by K-V monies. But the Washington and regional offices wrote their budgets three years in advance. Because they did not anticipate the decline in K-V spending, their budgets counted on a continued flow of K-V overhead funds. When the funds didn’t come in, rather than reduce spending, the regional office pressured local reforestation specialists to plant more trees, spray more herbicides, and do other K-V activities.

      “Many times, unnecessary projects are proposed and accomplished to finance the personnel to accomplish very necessary jobs such as planning and prework on future projects,” one silviculturist commented.¹ This created a chain of incentives: to fund the planners, they had to plant trees, and to plant the trees, they had to sell trees to timber companies.

      “The natural tendency of the bureaucracy to maintain and increase its budget provides a strong motivation for the Forest Service to make targets, not on-the-ground needs, the driving force in project work,” I told Representative Jim Weaver’s subcommittee. “Targets are easily budgeted; on-the-ground needs are not, since they are less predictable from year to year. As Mr. Zane Smith testified, the targets are set three years in advance. So targets set in 1979 through 1981, which anticipated high levels of timber cutting and high levels of need for reforestation, were overestimated because in 1982 through 1984 much less timber was cut and fewer acres needed reforestation.” Saying this was not “impugning the integrity of anyone in the Forest Service, which has some of the most honest and well-intentioned employees in the government,” I added. “But honesty and good intentions are not enough; bureaucratic and institutional forces overrule.”²

      After the hearing, I realized that the Knutson-Vandenberg Act helped explain many of the other controversies that swirled around the national forests. They included clearcutting, herbicides, roadless areas, below-cost timber sales, and the nondeclining flow policy.

      Clearcutting

      Congress appropriates funds for the Forest Service to arrange and administer timber sales, while timber receipts provide the funds for postsale activities, such as reforestation. From the forest manager’s viewpoint, the funds available for arranging sales are fixed, whereas funds for postsale activities are limited only by timber values and the number of acres included in sale areas. The ideal cutting method, then, is one that cuts the greatest number of acres at the lowest presale cost per acre.

      That means clearcutting. As the Forest Service often pointed out, clearcutting had the lowest presale costs since managers onlyneeded to mark the perimeter of areas to be cut. This allowed them to stretch appropriated funds to the greatest possible number of acres. A typical timber sale might include a dozen clearcuts, each located some distance apart. Since the Forest Service defined “sale area” as the land within a quarter mile of trees that are cut, managers could locate clearcuts up to one-half mile apart and apply K-V funds to all the land between them.

      At the same time (and contrary to repeated Forest Service claims), clearcutting often imposed the highest postsale costs because it created the harshest environment for reforestation: hot, dry sites, with soil temperatures sometimes reaching levels lethal to seedlings because of the lack of shade. Of course, this simplyallowed managers to keep more K-V funds for reforestation, including, in many cases, funds to shade each individual seedling.

      During the 1950s and 1960s, individual national forests discovered, either on their own or by the transfer of personnel from one forest to another, that clearcutting was much more lucrative than other cutting methods. Managers may not even have been aware that the budgetary process was shaping their decisions. They just knew that they got a more positive response from some activities than from others. No doubt some people within the Forest Service genuinely believed that clearcutting was economically and ecologically a superior practice. These people might be promoted over those who believed in selection cutting, not because of their position on clearcutting but because their decisions led to larger budgets for the agency, and thus they were viewed as more successful than supporters of other cutting methods.

      Herbicides

      The Forest Service often claimed that the softwood timber species they wanted to grow, such as Douglas fir and ponderosa pine, “needed” clearcutting for optimal growth. In fact, in many areas the harsh conditions created by clearcutting were more ideal for less valuable hardwood trees and shrubs, such as alders, maples, and oaks. Forest managers applied herbicides, often from helicopters, to kill the hardwoods and allow the softwoods to grow. Because of differences in the way that hardwoods and softwoods grow, managers had a small window of opportunity every spring during which herbicide spraying would kill hardwoods without hurting the softwoods.

      Herbicide opponents charged that the Forest Service sprayed chemicals whether or not they were needed. DuLaney’s report proved this to be true. As part of reforestation, many national forests routinely built one or two herbicide applications into the K-V plans for every sale. In turn, regional offices would give the forests an annual target to spray so many acres with herbicides so the regional offices could forecast their share of K-V overhead. Forest managers who were rated on their ability to meet targets had no incentive to find out whether herbicide spraying was actually needed on a particular clearcut because the money was available and if they didn’t spend it, they might fail to meet their target. Many managers admitted to DuLaney that, during the years when cutting rates were low, they sprayed herbicides during the wrong time of the year, when they knew spraying wouldn’t do any good, just to meet their targets.

      Below-Cost Timber Sales

      In the 1950s, the Forest Service claimed, with