Testimony before
Senate Committee on Agriculture, Nutrition, and Forestry
July 17, 1997

Northern Forest Stewardship Act - S546

I am David Guernsey from Kingfield, Maine. I am the President of the Sugarloaf Area Chamber of Commerce. Among my directors are the General Manager of Stratton Lumber Company, one of New England's largest and most modern dimensional lumber mills, and the President of Sugarloaf Mountain Corporation, one of New England's largest ski areas. I sit on the Economic Development Advisory Committee for Franklin County, which has a population of 25,000 and is approximately the same size as the State of Rhode Island. It is the only county in the Maine which maintains a full time Office of Economic Development. I sat on the Northern Forest Lands Council Citizens' Advisory Committee and presently chair the Kingfield Planning Board. I sit on the Board of the Maine Conservation Rights Institute, an organization dedicated to conservation through private land ownership. Time did not permit consultation with any of these organizations. I am speaking today for myself only.

The 3 towns which our chamber represents were singled out in the 1990 Northern Forest Lands Study as one of the five areas in the 26 million acre Northern Forest which were threatened with uncontrolled development. These threats never developed, nor, according to the Sewall Report commissioned by the Northern Forest Lands Council, did any of the other threats hyped by the Northern Forest Lands Study.

Our principal problem is not too much growth but the lack of it. The federal Economic Development Administration has even funded a $100,000 study to combat Franklin County's Long Term Economic Decline. We are faced with a capital intensive paper industry with its declining job base, a wood manufacturing industry which is stagnant at best, an extremely vulnerable shoe industry, and a tourism industry which must be carefully shepherded if it is to produce acceptable economic benefits. If we are to give future generations a viable economic structure, we must be able to use our land in resourceful and innovative ways.

The thrust of the Northern Forest Stewardship Act, however, is that our pressing problem is resource protection which must be addressed by constraining our land use options. I am extremely troubled that no attempt has been made to reconcile these incompatible views on the local level. There have been no field hearings on the proposed bill, and the local municipal and county governments have never even been notified that it is in the works. If I told our Economic Development Advisory Committee that we needed the federal government to help us constrain our available land use options, the laughter would be deafening.

Some local governments are learning of the proposed bill through unofficial channels. I have attached a resolution from Essex County, New York, in opposition. I know of other counties throughout the "Northern Forest" region which are considering similar resolutions.

The proposed bill is not an environmental proposal, rather it is first and foremost a Federal land acquisition program. A simple word count shows that "acquisition" tops "environment" 13 to 0. The bill is a land acquisition program which provided substantial benefits to powerful landowning and environmental interests, but bodes ill for Northern Forest communities and small landowners. I have attached a Boston Globe article outlining a John Hancock Insurance Company sale of a conservation easement on 30,000 acres to the State of Vermont for $95 per acre. This is a pretty good piece of work since they only paid a rumored $105 per acre, and they still own the land. Local communities, however, lost much of their potential for future economic development. They were never told in advance that this transaction was in the works, let alone given opportunity to voice their concerns.

An even more extravagant example occurred recently on Pierce Pond, just a few miles north of Kingfield. A division of the South African Pulp and Paper Company sold the US Forest Service a conservation easement over some 6000 acres for a little over $1 million. The Forest Service then paid another $444,000 for the loss of liquidity on the adjoining 16,000 acres of SAPPI caused by the government's forever "looking over the shoulder of the landowner", even though the government acquired absolutely no rights on the subject property.

This so called "shadow effect" has profound implications for landowners in the Northern Forest. Even the US Forest Service admits that a Federal presence causes quantifiable loss in the economic value of proximate private property. The landowner who is responsible for negotiating that presence, however, is the only one who receives compensation.

The Northern Forest Stewardship Act will most certainly encourage acceleration of such practices. The companion Family Forestland Preservation Tax Act will go even further and make such transactions exempt from federal income tax. These two acts as currently crafted represent simply gross corporate welfare on the backs of rural communities. Large landowners in Maine have even staffed up the Forest Society of Maine to facilitate such transactions.

Senator Leahy, in his introduction of the Stewardship Act on the Senate floor, said:

"Today's legislation is about empowering communities within the 26-million-acre Northern Forest"Were that the case, I would be among its strongest supporters. The Act, in fact, will do just the opposite.

The burning issue is a question of jurisdiction. I know from my work with the Kingfield Planning Board that a municipality can use zoning to put any restrictions on private land use it wishes. It can also use zoning, tax policy, and even eminent domain to encourage needed economic development such as industrial parks. When state and federal government acquire property rights, however, local governments lose all control over these rights and many of our land use options terminate. The Northern Forest Stewardship Act provides no enforceable protection against and only the scarcest acknowledgment of such problems.

Rural communities rely almost exclusively on the real estate tax base to fund essential local government services. The Act claims to address this problem, but the hard fact is that the Federal government has never fully funded the payment in lieu of tax program and likely never will. Present law does not even authorize payments in lieu of taxes for conservation easements, so this claim is disingenuous at best.

Proponents of the bill point to the "primacy of the state" in its provisions. The aforementioned John Hancock easement sale to Vermont is compelling evidence of the folly of this argument. The boundaries of the "Northern Forest" region have no natural validity, rather they were carefully crafted political boundaries, crafted to insure that less that 10% of the population of any one state resided therein. The "Northern Forest" concept is about as close to a textbook case of "tyranny of the majority" as one can find.

Even the stated "primacy of the state" is more illusory than real. The Forest Service has free rein to negotiate a study with a friendly university professor to confirm what the Forest Service wants confirmed. For a governor to turn down such a federal "research" grant would be political suicide. Local interests will be unable to complain as they won't know about it. Even if they were informed, they likely wouldn't have the resources to present a cogent response.

Case law suggests that the requirement for state consultation is limited to one time. Subsequently, federal agencies may be free to interpret their mandate as they see fit. Once real estate title has passed to the Federal government, the transaction is irreversible.

The hard, cold fact is that this bill will result in a massive increase in control of Northern Forest lands by government agencies which do not have the people's welfare at heart. Senators Leahy and Rudman in 1988 directed that the Northern Forest Lands process was "seeking reinforcement rather than replacement of the patterns of ownership" in the Northern Forests.

This very important constraint, which circumscribed all the deliberations of the Northern Forest Lands Council, seems to have been scrapped in the Northern Forest Stewardship Act.

We all have seen the human agony and dreadful land mismanagement endured by western states at the hands of uncaring federal land management agencies. Why in the world would we want to inflict this on ourselves?