fedgazette

Seeing the forest, or the trees?

Michigan State Roundup

Published May 1, 2006  |  May 2006 issue

In the past year, three wood-product firms have closed in Michigan, laying off about 600 workers, and each cited a lack of wood supply as a central reason. That appears to have sparked a bevy of new legislative actions—involving as many as eight bills—to ease timber-cutting regulations on private lands and raise harvests in state-owned forests in hopes of increasing timber and wood supply. Raising timber harvests is controversial by itself. But the legislative push comes with other entanglements, according to news reports on the matter.

For example, the legislative package is considering changes to a program designed to find the middle ground between the recreational and commercial-timber value of forests. The program, the Commercial Forest Act, gives private firms a property tax break for opening their lands to public activity. Given significant forest acreage, much of it owned by timber and paper companies, the U.P. has huge swaths of land enrolled in the program. Statewide, the program has about 2.2 million acres enrolled by some 1,300 property owners.

Local governments bear the financial brunt of the program's recreational incentives. The taxable value of forested land runs about $10 per acre on average; CFA lowers that to just $1.10 per acre. On top of that, the state pays local government another $1.20 per acre to help mollify the financial hit to the local property tax base.

Payments from both CFA enrollees and the state were slated to rise substantially, but Marquette's Mining Journal reported that a reworked CFA may scuttle any increases. That's only part of the CFA controversy. About 80 percent of enrolled land is held by just 10 firms, according to the Grand Rapids Press, and large landholders have been selling off road frontage and other parcels to create land-locked properties that receive the tax break but have no viable public access.

The Michigan Legislature complicated the matter further by considering a provision to allow landowners the ability to avoid an early-out penalty, along with another measure requiring that only new program participants (since 1995) have to provide proof of public access to the Department of Natural Resources—a rule that would affect only 6 percent of enrolled acreage, most of it held by small landholders.

Ronald A. Wirtz

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