At the Feb. 14 meeting of the State Land Board, members voted 2-1 to enter into negotiations with a private consortium to sell 82,450 acres of the Elliott State Forest.
Many critics have since urged the board to "hit the pause button." Gov. Kate Brown, who was on the losing end of the vote, is one of them. She has ordered the Department of State Lands to come back in April with an alternative plan that would allow for continued public ownership.
But the land board has been "pausing" on this matter for more than 20 years. Board members have never wanted to sell, but there is no public ownership option that would allow the board to fulfill its fiduciary obligations to maximize revenue for the public schools.
In 1995 the board released its first "Draft Asset Management Plan." The Elliott was then valued at $850 million. Management was concerned that timber harvest revenues were dropping due to rising costs of ownership, including environmental litigation.
All options were considered, and the land board was told by a consultant that "selling the Elliott State Forest would be the most effective way to maximize Common School Fund revenues."
Sadly, that recommendation was rejected. Instead, state officials spent the next two decades engaged in fruitless negotiations with federal regulators regarding compliance with the Endangered Species Act. Every time the board thought an agreement to cut more timber had been reached, it turned out to be a false summit.
Meanwhile, advocacy groups used the Elliott as a legal piñata. They successfully sued the State Land Board so many times that the forest stopped generating any revenue at all by 2013 and actually became a liability for schools.
The costs of this wait-and-see approach were not trivial. According to a report published by the board in 2014, the Elliott had cost the Common School Fund $1.4 billion in lost earnings since 1995.
Things actually worsened after the report was published. In 2015 the land board decided to finally sell the Elliott, but instead of taking competitive bids, the board established a fixed price. The board also downzoned the land by imposing significant timber- harvesting constraints on future owners.
The result was that the board received a single offer in 2016, for the state-mandated price of $220.8 million. The net result of 22 consecutive years of public ownership was a loss to the Common School Fund of at least $1.62 billion.
Gov. Brown now wants to renege on the sale entirely (despite voting for it in 2015) and use state bonding capacity to "buy out" a portion of the Elliott. This is probably the worst idea yet. The public already owns the forest; why should we pay debt service to buy ourselves out?
While the $220.8 million offer now on the table is a far cry from the $850 million or more we could have received in 1995, it's better than hanging on to a dead asset. Secretary of State Dennis Richardson and State Treasurer Tobias Read voted to sell the forest, and that was the right call. Once the money is placed in the Common School Fund, it will generate billions of dollars for schools over the next century.
John A. Charles Jr. is president and CEO of the Portland-based Cascade Policy Institute, Oregon's free market public policy research organization.