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During the eight-year period 1981-1988, the Tongass Timber 

 Supply Fund created as a result of Section 705 of the Alaska 

 Lands Act has cost the taxpayer a grand total of $393 million and 

 total Tongass timber program deficits rising to more than $50 

 million a year in 1983 through 1987. Stated differently, the 

 Tongass timber program lost 93 cents for every dollar spent in 

 1984 and 99 cents in 1985, 1986, and 1987. In 1988, "record" 

 high year for Tongass timber, the loss to the Treasury was still 

 85 cents on the dollar. 



In 1986, while the Tongass timber program was spending more 

 than $50 million of taxpayer funds, total annual cash receipts 

 were about $82,000. That means that 1986 timber receipts covered 

 timber expenditures for less than four hours of the first day of 

 the fiscal year. For the year, the taxpayer lost 99.8 cents for 

 every dollar spent. 



Matters only worsened in 1987, when there were no cash 

 returns from the Tongass timber program. Incredibly, that year 

 the taxpayer lost more than 100 cents for every dollar spent, 

 because of cash refunds to timber purchasers under the terms of 

 the 1984 Federal Timber Contract Modification Act. 



If current annual loss rates continue, the Tongass timber 

 program will lose more than half a billion dollars in the next 

 ten years. 



In its 1985 Section 706 (b) Report to Congress, the Forest 

 Service projected long term continued losses on timber sales from 

 the forest. Assuming a continuance of current market conditions, 

 the Forest Service predicted losses totalling $4.74 billion over 

 the next five decades, or about $90 million per year on average. 

 Under the most optimistic — and, most unlikely — forecast, 

 assuming high timber product prices and strong market demand, the 

 Forest Service projected agency and industry losses of $898 

 million in current dollars over the next five decades. 



It is argued by the Southeast Alaska pulp companies and 

 others that a variety of special circumstances has contributed to 

 the Tongass timber problems in the past eight years, including 

 the withdrawal of prime timberland for wilderness, "softening of 

 international markets due to a world-wide recession," and 

 competition from privately-owned Native forest lands. 



While some of these events have exacerbated the situation, 

 they were not the fundamental cause of the current uneconomic 

 timber program on the Tongass. The Tongass timber program was in 

 place and losing money long before any wilderness was set aside, 

 before international markets weakened, and before Native-owned 

 timber came into competition. 



Indeed, during the period of high demand, employment, and 



