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Show (3) Provide for coordinated operation of the reservoirs and other facilities. (4) Provide for State or local agency responsi- bility in operation of recreation facilities of less than national significance (except those located in na- tional forests, in national parks, or on similar lands). (5) Provide for State and local government con- tributions to the financing of development on a multiple-purpose program basis. (6) Administer Federal projects with due regard to local advantage, affording all reasonable oppor- tunity for local public and private enterprise in habitable parts of the region, with full provision for wise husbanding of resources. 2. Allocation of Funds to Local Political Units in Lieu of Existing Taxes Lost The Problem Provision for compensating local political units for losses or handicaps incurred in the development of water resources or the use of watershed lands for regional or national benefit. The Situation Throughout the Columbia Basin are many Fed- eral lands, a number of which are valuable water- sheds. In some parts of the basin these lands make up a large part of a county. To help meet the financial needs of the counties, the Federal Govern- ment makes certain contributions. In the case of national forest lands, some 48 million acres, 25 per- cent of the gross revenues are paid to the States in which the lands lie. In the Taylor grazing dis- trict lands, over 22 million acres, 12J^ percent of the revenue is returned to the State for distribution among the counties.1 For the 3 million acres of public domain lands not in these districts, a return of 50 percent is made. In the case of the Oregon and California railroad revested lands, 50 percent is paid to the counties now, but this will be in- creased to 75 percent. The lands held by the Bu- reau of Reclamation and the National Park Service do not return anything to the counties; neither does land in Indian reservations.2 1 Fifty percent of the fees collected from isolated or dis- connected tracts is also returned to the States. 1 Legislation has not been passed requiring in lieu payments from these lands. Indian lands are for all This method of contributing to local governments in lieu of taxes in some cases has upset orderly pat- terns. In the national forests, all the timber may be cut in a 5-year period, during which considerable money is made available to the county. However, once the timber is cut, it may be 10 years before other timber is marketed, and the county again becomes prosperous. If fire should sweep the whole area, there may be no timber available for a cen- tury, and Federal lands could make no contribution to local government during that time. On the other hand, grazing district lands provide a rather uni- form revenue for local governments because the lands are fully utilized by an industry harvesting the annual crop of grass. Similar problems will arise when extensive devel- opment of reservoirs takes place in headwater areas and on some main stem sites. Developments may not provide local benefits which compensate for the loss in taxable wealth incurred. Additional expenses also may be incurred through need for added schools, roads, and other facilities attendant upon Federal operations in the area. It also may be argued that the development of power sites on Federal initiative results in loss of taxes locally, since power developments would be taxed if they were undertaken by private corpora- tions. On the other hand, there are instances in which the immediate availability of power more than compensates for these apparent tax losses by providing a basis for enlarged economic activity, and a wealthier community or district. Conclusions In 1943, the President sent the Congress a report prepared by the Federal Real Estate Board.8 The Board, although making no definite recommenda- tions applicable to the Columbia Basin, agreed on certain principles which it suggests should govern Federal contributions based upon ownership. Briefly stated, these general principles are: (1) Each class of real estate should be considered separately- no blanket formula could bring about the desired results; (2) the amount of Federal contribution purposes a separate governmental unit. Bureau of Recla- mation lands and National Park Service lands provide significant local benefits which more than balance any local losses resulting from development. * This report, Federal Contributions to States and Local Governmental Units With Respect to Federally Owned Real Estate (H. Doc. 216, 78th Cong., 1st sess.), presents the facts based on a study of the problem. The Bureau of the Budget is currently studying it. 39 |
