County officials dealing with economic impacts
May 19, 2022
Wahkiakum County officials find themselves dealing with the good, the bad and the ugly.
The good is an increase in revenue from rising investment interest rates and state timber excise tax revenue; the bad is a cooling of timber markets that is chipping away at revenue from logging on county trust timber lands, and the ugly is the inflationary impact on fuel used to power modes of transportation.
The increases in interest rates since the beginning of 2022 is good news, Treasurer Tammy Peterson told the county board of commissioners on Tuesday.
Peterson has invested $18.8 million in funds she manages for the county and other taxing districts who have pooled their funds with the county. The interest rate paid on those investments was 0.8 percent in January; in April, the rate was 0.4 percent.
Peterson said she had budgeted $15,000 for the whole year.
"I had budgeted $15,000 in interest income for the whole year," Peterson said. "If it holds, it will be $86,000. That's good news."
Similarly, the income from state managed timber excise tax--tax paid on the harvest on privately owned timberland--has exceeded expectations. For the first quarter of 2022, state officials had predicted $9,600 in income; the actual payment was close to $85,000, Peterson said.
The hot log market has cooled a bit, regional managers of county trust timberlands told county officials on Tuesday.
A large sale named Elochomotive Sorts should yield $1.7 million for the county this year, said Department of Natural Resources Regional Manager Padraic Callahan.
The sale was originally expected to produce $1.8 million, he added, but it didn't yield as much timber as the initial cruise predicted.
A large sale planned for harvest in 2023, should yield $1.29 million, Callahan said, and with revenue from one or two smaller sales, the county could expect $1.7 million in 2023. However, the softening market could reduce that revenue, he said.
"Prices (for logs) are up and have stayed up," commented Commissioner Dan Cothren, who is employed in the timber industry.
"The problem now is the fuel cost," he said. "Contractors may not be able to log because they can't pay the costs. Independent truckers are being hit hard.
"I look at this (the DNR report); it looks good, but there's a lot of unknowns out there."
One of those unknowns is whether or not any county trust timber will be included in the newly announced state program to preserve legend forests.
"Right now it's hard to tell where we'll end up," said DNR District Manager Eric Wisch. He added that he doubted there would be a lot of the particular sites in the region.