The latest apparent impact of the so-called “sequestration legislation” – the complex set of automatic federal spending cuts put into law by President Barack Obama in August 2011 – is an effort to force states and local governments to return funds appropriated in lieu of state and local taxes on federal lands.
The U.S. Forest Service is using sequestration as the basis for trying to force dozens of states to return $17.9 million in federal subsidies. Under the gun are so-called county payments. County payments are a federal-state revenue sharing plan that has been in place virtually since the inception of the national forest program by President Teddy Roosevelt.
Since 1908, hundreds of counties in states with national forests received a quarter of the revenue from the timber cut and sold from federal lands.
Those funds served in lieu of the collection of local property taxes and subsidized schools, roads and first-responder services around the country – despite the fact that the local governments receiving the payments have long questioned the equity of taking the federal timber payments in lieu of property taxes. The Supreme Court ruled shortly after the inception of national forests that state and local governments could not tax national forest lands.