Congressional Republicans’ Big Shift on Public Land Payments to Counties

When President Teddy Roosevelt and Gifford Pinchot first established the modern national forest system, they set up a key financial relationship between the U.S. government and rural communities. Many of these remote communities didn’t have a large enough tax base to fund essential services, nor would the public lands within their borders be taxable, which created additional revenue challenges for growing communities. To address this, the U.S. Forest Service began sharing 25 percent of revenue from commercial activities, primarily timber, with local governments as compensation for those foregone property taxes. Since 1986, these payments and subsequent reforms have provided local governments with nearly $25 billion (in 2024 dollars) for development on Forest Service lands, helping to fund services such as schools, road systems, public safety, and more.

The One Big Beautiful Bill Act (OBBBA) effectively ends these payments:

1. The OBBBA failed to reauthorize one of the most important forest and timber payment programs, the Secure Rural Schools and Community Self-Determination Act, and Congress has not passed separate legislation to do so.
2. The final version mandates minimum levels of timber harvests and new long-term contracts but redirects the 25 percent revenue share associated with long-term contracts back to the federal government to pay for the OBBBA’s tax cuts for the wealthy, jeopardizing the timber revenue-sharing program.

The OBBBA walks away from a partnership dating back to 1908, in what the National Association of Counties has called the “Big Shift.” As a result, rural public land counties that help to feed, power, and build the nation are much less likely to benefit from their natural resources when paying for local services and infrastructure.

The end of secure rural school payments hits rural counties hardest

The Secure Rural Schools Act and Community Self-Determination Act (SRS), which provides financial assistance to counties affected by declining timber revenue from public lands, expired in fiscal year 2023. The House version of the One Big Beautiful Bill Act included an extension of the SRS, but the Senate parliamentarian stripped that provision, and Congress has not reauthorized payments separately, jeopardizing the long-running promise from the federal government.

The interactive map below includes data on the immediate impact of ending SRS payments for every county, parish, and borough in the United States.

According to Center for American Progress analysis, the Forest Service paid out $207 million less after the SRS expired. Of these cuts, $159 million were in nonmetro counties and $86 million were in the most rural and isolated counties in the United States.* These counties are least able to replace lost revenues with higher taxes and will thus be most affected by cuts elsewhere in the OBBBA, including those affecting rural hospitals and health insurance.

For more information, see the “Methods and Data” document and/or download the data via this spreadsheet.

Ending payments to rural counties and schools fuels public land sell-off proposals

Ending these payments to counties and schools exacerbates the budget stress faced by many rural communities in the United States. The legacy of the anti-tax movement that began in 1970s California has left many local governments—in both California and other states such as Colorado and Oregon—unable to capture tax revenue from economic diversification and growth. Constitutional amendments in these states freeze tax rates, cap revenue collections, or limit property assessments, disconnecting tax revenue from the way the economy is growing and changing. Additionally, structural changes to the economy, including consolidation and automation in many rural industries, have left places behind. The OBBBA’s big shift away from payments to rural families and communities exploits legitimate grievances and challenges in those areas, but cutting spending in service of tax cuts for the wealthy does more harm than good.

Given these challenges, rural leaders might consider supporting proposals to sell or transfer lands to states or private interests in an attempt to raise revenues if they feel the federal government is not going to be a reliable partner. Organizations such as the American Lands Council and Property and Environment Research Center argue that because state trust lands generate more income for public services at a lower cost, the federal government should consider land transfers to the states—a process that could quickly transition to land sell-offs. In an interview with The Bulletin, one Central Oregon farmer voiced his concerns about county payments more directly:

Federal lands are not on the tax rolls and are not being utilized. At one point they were being logged and managed and those generated revenues for rural communities. In more recent years that hasn’t been the case. Quite frankly, if the federal government is not going to manage them, or do a better job of managing them, I see no reason why the federal government should just continue to hold the land if it’s not going to utilize it.

The OBBBA stopped short of selling off public lands. But by walking away from federal responsibilities to help support local services and infrastructure—particularly in rural counties that host public lands—the OBBBA could further undermine support for retaining public lands. These lands are among America’s most enduring commitments, preserving access to the nation’s wildlands, wildlife, and other special places—for everyone, not only those with social or economic privilege. When public lands are utilized to produce timber, water, and energy to help fuel the nation’s prosperity, the rural communities doing the work should benefit. Delivering benefits both locally and nationally helps guard against land sales and exploitation.

There are several solutions that can help protect public lands

One bright spot is that rural areas are increasingly benefiting from recreation on public lands. In both California and Colorado, county governments in the Sierra Nevada and Rocky Mountains receive the majority of their revenue-sharing payments from recreation, far exceeding receipts from timber. As the current administration and Congress shift payments and income away from U.S. communities—particularly those associated with traditional natural resource sectors—the value and importance of recreation, renewable energy, and other diverse public lands uses will only grow.

To keep public lands in public hands and help secure the success of the rural communities around them, these payment programs need a permanent solution. This can come in the form of a permanent fund that would save and invest revenue from public lands and make stable and predictable payments to communities forever—similar to what was proposed in a 2018 bipartisan Senate bill. Such a fund would not require future appropriations, meaning taxpayers would not be asked to pay for future bailouts. Moreover, it would reduce dependence on the federal government by decoupling payments from political budget fights. Without a revenue requirement each year, communities and public land managers could thoughtfully decide how best to manage public lands for a wide variety of uses and values, not only those that can be sold to the highest bidder.

Conclusion

The revenue of rural communities—particularly those that do or once did produce timber—will be hit particularly hard by the OBBBA. A permanent solution that decouples county budgets from political budget fights is the only way forward.

The authors would like to acknowledge Shar Ghavami, Sanjana Bettadpur, Bill Rapp, Sophie Conroy, Nicole Gentile, and Steve Bonitatibus for their contributions to this column.

* Authors’ note: All amounts are in inflation-adjusted 2024 dollars.