The Oregon Timber Industry Won Huge Tax Cuts in the 1990s. Now It May Get Another Break Thanks to a Top Lawmaker.

In the 1990s, Oregon’s powerful timber industry used its influence to win a series of tax cuts that have cost local governments a cumulative $3 billion. Once-vibrant communities were left struggling to pay for basic services without the taxes that once came from logging the valuable forests that surround them.

Now the industry is in line for another tax break, thanks to a key ally.

With the costs of fighting Oregon’s wildfires climbing, the timber industry worked with policymakers behind closed doors to develop legislation that would reduce what industrial forest owners pay for protecting their cash crop from flames. Timber lobbyists not only helped write the bill, they even helped write a top lawmaker’s talking points.

When the Oregon Legislature opens a monthlong session Monday, lawmakers in the nation’s top lumber-producing state will weigh a bill proposed by Sen. Elizabeth Steiner, a Portland Democrat running for state treasurer. Steiner, one of the state’s top budget writers, wants taxpayers to pay $7 million more annually for fighting fires so timber and ranching interests can pay less.

Her rationale: fairness. She says wildfires affect everyone, not just timberland and ranchland owners. Steiner told lawmakers at a Jan. 10 hearing that “we wanted to be sure that we came up with a solution that reflected the fact that this is a statewide problem.”

Meanwhile, a competing effort would do the opposite: raise taxes on timber. Democratic Sen. Jeff Golden’s bill would restore some of the income lost when lawmakers slashed taxes on the industry in the 1990s, which sapped money for libraries, prosecutors and sheriff’s patrols in communities where trees are harvested.

Steiner said she expected Golden’s plan to get “a robust public hearing,” but she also voiced concerns.

Oregon is one of a handful of states that place no limit on how much corporations or anyone else can give to political campaigns, and the timber industry has for years donated more to lawmakers in the state than anywhere else in the nation, a 2021 analysis by The Oregonian/OregonLive found.

Timber companies also harvest more trees and pay less in taxes in Oregon than in neighboring Washington state, state analyses have shown.

Records show that timber companies and their trade groups have given Steiner $24,000 since 2020, most recently a $1,000 December donation from Weyerhaeuser, a major forestland owner. Golden’s financial disclosures list only one check from a timber company in his career, and the records show he gave the $500 to a nonprofit focused on restoring forests.

Steiner told ProPublica that her bill — cosponsored by one other Democrat and two Republicans — had nothing to do with campaign contributions and that Oregon’s history of cutting timber taxes is “only partially relevant to this particular conversation.”

“You can make an argument that we’re letting them off easy, or that we’re giving them the big tax break,” Steiner said. “And I’m gonna say, I don’t know, you may be right. It’s a bigger conversation.”

A 2020 investigation by ProPublica, Oregon Public Broadcasting and The Oregonian/OregonLive revealed how the timber industry wielded its influence to win the 1990s tax cuts even as timber harvests soared and local jobs disappeared with dramatic advances in automation.

Steiner said she hadn’t read the investigation. Golden has repeatedly cited the news organizations’ findings as essential reading.

The Wall Street real estate trusts and investment funds that now control much of Oregon’s private timberland “seem to be taking so much natural wealth out of Oregon forests,” Golden said, “without the corresponding benefit to communities and workers that traditional Oregon-based timber companies offer.”

Golden and seven Democratic cosponsors want a measure added to the November ballot that would raise taxes on timber companies by between $75 million and $110 million a year and partially restore what counties once received. Some of the new money would go to wildfire protection and protecting drinking water supplies that are threatened by logging.

He would also eliminate the Oregon Forest Resources Institute, a tax-funded agency that the news organizations found operated for years as a de facto lobbying arm of the industry. (The institute did not respond to a request for comment about the legislation.)

Other lawmakers have tried to tackle these issues before and failed.

State Rep. Paul Holvey, a Eugene Democrat, has been introducing bills to restore logging taxes for a decade. “Getting the Legislature to stand up and understand this issue and recognize the impact it’s having on our communities, our budgets and just across the board,” Holvey said, “it’s always been a challenge.”

During the 2021 legislative session, lawmakers set out to increase taxes on logging but ended up temporarily cutting them instead.

In heavily forested Polk County, west of Salem, cuts to Oregon’s tax on the value of timber took away more than $100 million in revenue over the years, the news organizations found.

Jeremy Gordon, one of three Polk County commissioners, said his county has to ask voters to approve new levies every five years just to afford basic public services like 24/7 sheriff’s patrols, jail staff and district attorneys. Golden’s proposed tax would allow the county to drastically reduce what taxpayers are asked to spend.

“That would be a big chunk of our public safety levy,” Gordon said. “I mean, that would be significant.”

On the other hand, Gordon is not enthusiastic about Steiner’s proposal because it pushes more firefighting costs — which include the cost of protecting the industry’s trees — onto taxpayers.

The head of a tax watchdog group also said she was taken aback by what Steiner put forward. “I think that Sen. Steiner was rolled by the industry,” said Jody Wiser, president of Tax Fairness Oregon.

“It absolutely makes no sense that legislators would go along with it,” Wiser said. The timber industry has “massive tax breaks already. They absolutely should not be getting additional tax breaks.”

The bill contains a complex variety of tax changes. But on the whole, it reduces costs for big timber and ranchland owners and raises them for Oregon income tax payers and people who own homes in the woods, among others. If the legislation passes, the state’s general fund alone would take a $7 million hit.

Weyerhaeuser, a publicly traded $24 billion real estate investment trust with 1.4 million acres of forestland in Oregon, participated in a private working group that agreed on Steiner’s proposal.

Betsy Earls, a Weyerhaeuser lobbyist, helped craft a two-page “talker” for Steiner that described how the bill’s cost shifts would create a system that is “stable and equitable.” Earls’ role in crafting the talking points was first reported by the Oregon Capital Chronicle.

Kyle Williams, a lobbyist for the Oregon Forest & Industries Council, an industry group whose funders include Weyerhaeuser, sent the talking points to Steiner on Nov. 28, according to an email that Steiner’s office provided. Weyerhaeuser donated $1,000 to Steiner’s campaign less than three weeks later.

“We support candidates in our operating areas across the country, and across the political spectrum,” a Weyerhaeuser spokesperson said.

Steiner said the industry’s donations had no effect on her position.

“I have a reputation as somebody who does her homework, works really hard to take a balanced approach, and that’s why entities across the political spectrum are so comfortable contributing to my campaign,” she said.

A spokesperson for the Oregon Forest & Industries Council said the trade group had not yet seen Golden’s bill and had no comment.

Golden and Steiner are refining the details of their bills as lawmakers prepare for their monthlong session. But Golden wants to see his plan on the ballot in a presidential election year, when turnout is typically higher.

Staff advisers to Gov. Tina Kotek also worked on plans for promoting Steiner’s bill, emails provided by Steiner show. A “communications strategy” document called for the governor’s staff to brief Kotek and get her support.

A spokesperson for the governor, Elisabeth Shepard, said Kotek’s staff only provided “technical support” to the group working on Steiner’s bill. Shepard declined to comment on the apparent contradiction.

Asked whether the governor supported Steiner’s proposal or Golden’s, Shepard said the governor “looks forward to reviewing any legislation on this matter that makes it to her desk.”