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K-V Calamity

U.S. Forest Service "Replanting Fund"

$575 million

"[T]he question is are we going to enable them to continue to do this practice [divert from the K-V Fund for overhead] which is working to the detriment of taxpayers and working to the detriment of the environment?" Representative George Miller (D-CA), July 22, 1998.

The Knutson-Vandenburg (K-V) Fund was established in 1930 to pay for the reforestation and restoration of logged over areas of the National Forest System. However, the U.S. Forest Service (USFS), without statutory authority, siphons money from the "Replanting Fund" to pay for basic overhead costs such as office equipment and rent. In fiscal year 1997, the last year for which figures are available, the USFS spent as much as 49 percent of the K-V Fund on overhead expenses. This fund mismanagement not only costs taxpayers, but has also stopped funds from going to the seedling replanting, brush removal and wildlife habitat restoration needed after logging takes place.

Green Scissors Proposal
Enforce the law as it was originally written and prohibit the USFS from spending money from the Replanting Fund on overhead costs. This action would save taxpayers about $115 million in fiscal year 2003, which would translate to a five-year savings of $575 million. It would also ensure that vital environmental restoration needs do not go unmet.

Current Status

In fiscal year 2001, Congress mandated that the USFS use no more than 20 percent of its six off-budget trust funds, including the Knutson-Vandenburg Fund, for indirect obligations, such as overhead spending.

Program Hurts Taxpayers

The USFS improperly spends tax dollars on its bureaucracy. A General Accounting Office (GAO) report stated that the USFS spent $220 million from the K-V Replanting Fund during 1993-97 on agency overhead instead of spending the money on restoration projects. Agency overhead expenditures that indirectly support the USFS commercial logging program should be paid for by revenue from that program.

The federal commercial logging program already loses hundreds of millions of dollars per year. A separate GAO audit reported that the commercial logging program lost $1.04 billion from 1995 to 1997. Allowing the USFS to divert money to overhead compounds this waste of tax dollars.

The USFS lacks accountability. In congressional testimony given in March 1998, the GAO stated that the USFS lost $215 million in funds that it could not account for in fiscal year 1995. The USFS should be made to follow the law and stop adding more tax dollars to its own bureaucratic coffers.

Program Hurts the Environment

Lack of funds means lack of reforestation. For every dollar the USFS spends from the Replanting Fund on microwave ovens or office supplies, less money is available to restore clearcut lands and eroding hillsides.

Failure to address restoration needs compounds environmental degradation. The longer a steep slope goes unplanted, the longer it spills sediment into fish habitat and drinking water supplies. The agency's waste creates larger, more complex environmental problems over time.

Contacts

• Cena Swisher, Taxpayers for Common Sense, (202) 546-8500 x108;
• Sean Cosgrove, Sierra Club, (202) 675-2382.