Climate Program Could Have Major Impacts on Local Fire & School Districts
In 2021, Washington State’s legislature enacted the Climate Commitment Act (SB5126), more commonly referred to as the Carbon Cap and Trade program. Industries that are seen as responsible for carbon emissions, such as the petroleum industry, are required to buy credits from the State to continue conducting their business as usual, and the resulting revenue is to be invested to fund clean transportation, energy conservation for climate resiliency, and a transition to clean energy. Critics of the program claim that the program will do little to actually reduce emissions while resulting in what is amongst the highest fuel costs in the nation.
The State’s first- and second-quarter 2023 carbon credit auctions raised over $850M of fees extracted from carbon-emitting industries. The State is now looking to invest the proceeds at the same time as Washington consumers feel the pinch from the cost that is evidently being passed down to them. A healthy portion of these fees is proposed to be used for forestland conservation.
This past June, the Washington Department of Natural Resources (DNR) reached out to a handful of counties, including Jefferson County, to see if they wanted to participate in the use of $70M funded by the Cap and Trade program to purchase private forestlands. The purchased private forestlands would replace older State forest trust lands managed by DNR and county trust lands, also managed by DNR, that have previously been encumbered with environmental restrictions.
The Jefferson County Commissioners responded to DNR in a letter dated June 27, 2023. The Commissioners’ response conveyed their enthusiasm for the County’s participation in the program, stating that they wanted to be actively involved in Natural Climate Solutions (e.g., Cap and Trade program) investments and, going forward, in an expanded Trust Land Transfer program. The Commissioners stated they wanted to utilize the investments to grow the base of working forests within the County and render its forest products economy more robust. The Commissioners proceeded to identify approximately 500 acres of State trust lands and common schools trust lands within the County that it proposed for conservation through the Cap and Trade investment program, and another 1,500 acres proposed for conservation through future Trust Land Transfers. To replace these lands, the Commissioners noted they had identified about 2,500 acres of timberland owned by Rayonier that it proposes to be purchased to replace the conserved land. Finally, the Commissioners expressed a desire to have the County co-manage forestland with DNR.
At a cursory level, the goals expressed by the Commissioners and the transactions proposed make sense. But digging further, there are serious doubts and questions about the proposed transactions, whether those goals would be met, and the costs to local fire, school, hospital, library, and cemetery taxing districts within the County. Those “junior” taxing districts, which perform essential functions, rely heavily on the revenue provided by DNR management of State forest trust lands and common schools trust lands. For example, Quilcene Fire Rescue has in recent years received approximately $250,000 annually in State forest trust land timber revenue, which it has used to replace aged apparatus and pay for staffing. It appears that the transactions proposed by our County Commissioners may detrimentally impact that critical revenue stream, without any replacement revenue from the County or State having been identified. This could result in these districts having no choice but to look for local taxpayers to make up the difference.
On August 8, 2023, the Jefferson County Fire Chief’s Association, which includes the Chiefs of the Brinnon Fire Department and Quilcene Fire Rescue, as well as East Jefferson Fire-Rescue and Discovery Bay Fire, sent a letter to the Commissioners concerning the matter, essentially saying “not so fast.” It noted that the proposed transactions appeared to swap harvestable (and thus near-term revenue-generating) DNR parcels for immature private parcels that would not generate revenue for decades to come. It also noted a loss of timber excise tax revenue from the reduction of private timberland and questioned whether the private forestlands could be harvested once placed under the more restrictive harvest policies followed by the DNR.
The Fire Chiefs expressed the need to balance natural climate solutions and conservation with other needs of the community, including infrastructure, public safety, and social services. Concern was also noted for the potential adverse impact on the local economy through the loss of private-sector timber jobs. The letter noted the need for transparency and local stakeholder involvement in such decisions, stating that junior taxing districts, such as the fire districts, had previously requested such involvement but had not been consulted. It was noted that the $70M for replacement lands should be spent equitably. Finally, while it was agreed that environmental considerations were important, the Fire Chiefs stated that these considerations should not overshadow the pressing needs of local schools and fire districts. The Commissioners were asked if they would commit to making up funding shortfalls resulting from their proposed course of action, as at least one other County has done.
The Fire Chief’s Association has challenged our County Commissioners to be more transparent and balanced with respect to these timber transactions. It remains to be seen how our County Commissioners respond.