Passage of 2c Managed Forest Land tax classification
Minnesota woodland owners scored a major victory this year with creation of a new property tax classification for vacant rural land. The new 2c Managed Forest Land class rate is 35% lower than comparable land in the 2b timberland class. Property tax reform of this nature reduces financial pressure that can force individual and family woodland owners to subdivide and/or sell their woodlands.
Property tax reform of this nature was recommended in Minnesota’s new statewide conservation plan and advocated by a number of organizations including the Minnesota Forestry Association, Minnesota Seasonal Recreational Property Owners, and [many others]. For more info on the new 2c Managed Forest Land classification, check the following links: overview and enrollment, clarification of eligibility, info from the MN Dept. of Revenue, and discussion.
Market downturns, community and landowner impacts
Driven largely by the weak housing market and reductions in new construction starts, major mill closures continued in Minnesota this year. This year major mills have closed in Cook and Bemidji indefinitely and Grand Rapids permanently. This is a huge story for many reasons. Among them:
- These closures have huge impacts on local communities and loggers who make their living harvesting, selling, and delivering local wood to these mills.
- By reducing local demand for wood products, they also affect stumpage prices, making it harder for woodland owners large and small to manage their land.
- According to a 2004 DNR brochure called Value Added Economic Impact of Timber Harvest in Minnesota, for every dollar of timber harvested, there is $41.60 in value-added manufacturing. As capacity for value-added processing is reduced, there will be corresponding overall losses to rural communities.
Emergence of carbon markets
Carbon credit markets have been a tantalizing concept in Minnesota for years. In 2008, this issue has boiled up to the surface. The basic concept is that growing forests capture and store atmospheric carbon. Because atmospheric carbon is a major contributor to global climate change, reductions may slow the climate change process. Under carbon trading systems, woodland owners who actively grow and tend their woods may be eligible to receive payments for the carbon sequestered and stored.
Although these markets are not yet well established in Minnesota, some Minnesota woodland owners are already receiving carbon credit payments for new plantings. With speculation that the new administration and congress may move forward on national carbon cap & trade legislation, there is a great deal of interest in potential future market development.
You can learn more at our carbon credits page, which includes a link to an excellent guide to carbon credits for Minnesota woodland owners. There’s an excellent article on carbon credits in the Fall 2008 issue (PDF) of DNR-Forestry’s Market Place newsletter. There’s also an exciting conference in the works for Cloquet in late February 2009 on carbon credits and other ecosystem services (more here soon…).
Biomass, biomass, biomass
Woody biomass also made a lot of headlines this year. Much of this attention was driven by sharp fuel price increases leading to consideration of alternative fuel sources. Woody biomass, in addition to being local and perhaps less expensive that fossil fuels, is closer to carbon neutral to the degree that it offsets fossil fuel consumption.
The Minnesota Forest Resources Council, with input from a wide variety of stakeholders, published guidelines for the sustainable harvest of woody biomass from forest and brushland sites. These guidelines are now part of the MFRC’s voluntary site-level forest management guidelines, which help to ensure sustainable timber harvest in Minnesota.
How will all this interest in woody biomass energy affect Minnesota’s family forest owners? High fuel prices make alternative energy more attractive on the one hand, but also increase transportation costs, some think prohibitively. Either way, biomass has become a major story in 2008. Some say we’ve been down this road before and that interest will fade as it has in the past. Others feel that concern about climate change may give biomass energy the boost it needs to succeed on a large scale this time. Only time will tell.
Passage of legacy amendment
Minnesota voters did much more than help elect a new president this fall: They also voted to approve a constitutional amendment that will allocate a new 3/8 of 1% sales tax to natural resources and the arts for the next 25 years. The (more than) $64,000 question about how the money will be allocated remains unanswered, but a council has been named to answer this question.
According to the Minnesota DNR (source), new revenues under this amendment will be allocated as follows:
- 33% to a newly created Outdoor Heritage Fund to be spent only to restore, protect, and enhance wetlands, prairies, forests, and habitat for game, fish, and wildlife (approximately $80 million in FY 2010 and $91 million in FY 2011);
- 33% to a newly-created Clean Water Fund to be spent only to protect, enhance, and restore water quality in lakes, rivers, streams, and groundwater, with at least 5% of the fund spent to protect drinking water sources (approximately $80 million in FY 2010 and $91 million in FY 2011);
- 14.25% to a newly created Parks and Trails Fund to be spent only to support parks and trails of regional or statewide significance (approximately $35 million in FY 2010 and $39 million in FY 2011);
- 19.75% to a newly created Arts and Cultural Heritage Fund to be spent only for arts, arts education, and arts access, and to preserve Minnesota’s history and cultural heritage (approximately $48 million in FY 2010 and $54.5 million in FY 2011) (source).
Learn more about the natural resources portion of the legacy amendment from the Minnesota DNR.
What do YOU think are the biggest stories of the year? Post a reply and let us know.