Direct, Indirect, and Cumulative Effects of No-Action Alternative A to Economics 



None of the employment, income, or trust fund effects that result from the action alternatives 

 would occur with No-Action Alternative A. 



Direct Effects of Action Alternatives B, C and D to Economics 



Timber sale Effects 



The estimated revenue and expenditures associated with the Phoenix Timber Sale are shown in 

 Table 4-8. Because no timber-harvesting impacts are associated with No-Action Alternative A, 

 the remaining analysis will focus on the other 3 alternatives. The 3 alternatives analyzed may 

 ultimately be broken into smaller sales, but are treated as a unit for the purpose of this analysis. 

 The volume associated with Action Alternative B and C is 3.0 MMBF. The corresponding 

 volume for Action Alternative D is 1.5 MMBF. 



Stumpage prices have improved in recent months but remain below the long-term average, are 

 highly dependent on the housing market and the import market, which dependent primarily on 

 mortgage rates and currency exchange rates, respectively. The interest rate, in part, determines 

 who can "quality" to purchase a home. Interest rates are currently at very low levels, which have 

 not been seen since the late 1950s and early 1960s. These low interest rates impact the housing 

 market by stimulating new construction to satisfy the demand for housing from individuals who 

 can now "qualify" to purchase a home. The economy is in a period of increasing growth and 

 appears to be moving out of the recession. As a result, housing starts appear to be remaining 

 strong. A weaker dollar relative to most other currencies has stimulated exports and made 

 foreign lumber more costly in US markets. These changes have resulted in recent increases in 

 the prices paid for wood at all market levels in recent months. The timber prices used in this 

 analysis attempt to recognize the current market conditions (see Table 4-19) by showing the 

 difference in revenue to the trusts from the 3 action alternatives. 



The estimated school trust income from Action Alternative B is $395,700, enough to fund the 

 education of 65 students for 1 year, based on an average cost of $6,038, as determined from 

 information provided by the Montana Office of Public Instruction (see Table 4-19). If the sale 

 does not take place no students are benefited. Thus, one of the "costs" of not harvesting the 

 timber, compared to har/esting under Action Alternative B, is the loss of financing for 65 

 kindergarten through grade 12 students for 1 year. If the trust does not fund these students 

 through the sale of timber, funding might come from other sources, primarily property taxes. 



The School Trust income from Action Alternative C is estimated to be $455,400, enough to fund 

 the education of 75 students for 1 year, based on an average cost of $6,038, as determined by 

 information provided by the Montana Office of Public Instruction (see Table 4-19. If the sale 

 does not take place, no students are benefits. A "cost" of not harvesting compared to harvesting 

 the timber under Action Alternative C is the loss of financing for 75 kindergarten through grade 

 12 students for 1 year. 



Action Alternative D would generate approximately $206, 100 in School Trust income. This 

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