Tree Growth, State of the State and ‘roadmap’ progress

Steve Shaler of the University of Maine, who chaired the Tree Growth review committee, presented the report at Taxation Thursday.

There’s a lot to talk about today, including the release Thursday of the new report on the Tree Growth Tax Program, the governor’s State of the State address Tuesday, and an update on the progress of our industry’s roadmap.

But the big news is Verso’s announcement to start up its idled machine — employing 120 workers — and produce container board. This is great news and opens up markets for softwood and sawmill residuals.  It’s also exciting to learn they are diversifying their production into container board products. Also exciting is the announcement by two cross laminated timber (CLT) firms this week of their intentions to build facilities in Maine. We’re making great progress in building a stronger forest economy.

I served on the committee that reviewed the Tree Growth Program and our report included answers to all the questions that the Taxation Committee gave us. Our recommendations include an understanding that this program has many pieces to it and even now there are things that assessors don’t know about the program. For example, it’s not universally known that the Maine Forest Service can provide assistance in interpreting Tree Growth management plans.

The full report is 76 pages, so here’s a link to the Executive Summary.

So one of our recommendations is building a best management practices manual for the program. We’re recommending that the Maine Revenue Service, Maine Forest Service, the landowner community and the Maine Municipal Association get together and develop this manual. It can be handed out to anybody involved in the program and used as a reference that can be built upon to help clarify all the rules, responsibilities and penalties. We see that as a very important outcome of the group getting together.

The group noted that the Tree Growth program is built around the the involvement of licensed professional foresters. In cases where a forester may approve a management plan that is not in compliance with the Tree Growth requirements, we think this is an issue for the professional licensing board. We seek clarification from the Attorney General’s office on who has standing in bringing a complaint to the Licensing board. Rene Noel from the Association of Consulting Foresters helped guide our discussion of this issue. The governor’s bill (LD 1599) suggested that the MFS have greater authority in dealing with Tree Growth landowner compliance, but after much discussion the group believed the current system, if uniformly administered, can identify and take action with landowners not committed to the program.

Another important factor in limiting recommended changes in the Tree Growth program is that significant changes were  implemented in 2012 in an agreement with the MMA, MFPC, Maine Farm Bureau and SWOAM (now Maine Woodland Owners). These changes reflect actions taken to strengthen the program and will require more time to take effect in the annual cycling of tree growth re-certifications. More details are found in the report.

Executive Director Patrick Strauch (center) and other committee members attended the Taxation Committee hearing.

It was a good effort and we appreciate the efforts of Steve Shaler, director of UMaine’s School of Forest Resources, who chaired the committee, with assistance from Dr. Adam Daigneault, assistant professor of Forest, Conservation, and Recreation Policy.

I listened to the governor’s State of the State address Tuesday and he emphasized the property tax dollars that he said are lost with the increasing enrollment of land into land trusts. I understand his concern about conserved land, but I just don’t want people confused. There are many acres of large conservation easements in the north country. MFPC members involved in these opportunities are paying land taxes on these enrolled programs. These working forest easements reflect the balance of compensation for public value (i.e. development rights and in some cases access right) and maintaining the ongoing forest operations that produce wood and Maine jobs.

In another part of the governor’s speech, he discussed his intention to submit a Commercialization Bond package designed to incentivize business investment.  We know this type of incentive is meaningful. For example, the recent allocation of bond money administered by the Maine Technology Institute (MTI) yielded projects very important to the forest industry, including the Verso expansion and proposed CLT plant by SmartLam. So we know a demand exists for these programs.

It’s important that this potential funding be based on a well-evaluated plans, but this could provide a really important tool to attract investment to Maine to both our existing businesses and to other businesses that might be thinking about relocating to Maine. The “roadmap” process, officially called the Maine Forest Economy Growth Initiative (MFEGI), is progressing well. This fall, thanks to federal support, we’ll release a report that identifies the global forest products markets in which Maine is most competitive, along with the specific actions necessary to create a more diverse forest economy while increasing our economic output. In the meantime, here are the projects underway:

  • A global market analysis (target release: June 2018) to identify the current and emerging global forest products markets where Maine is likely to be most competitive. This analysis is being conducted by Indufor, a leading global forest consultant, and includes competitive benchmarking to compare Maine to other forest industry states, provinces and countries.
  • A wood supply analysis is being conducted by the James W. Sewall Co., to model what species are available across the state so we can match Maine’s forest resources to the market opportunities.
  • A transportation analysis to determine where infrastructure improvements are necessary in response to anticipated changes in how wood moves across our state
  • Working with Innovative Natural Resource Solutions to understanding the costs and benefits of modern wood energy markets for low value wood and sawmill residuals, including Combined Heat and Power (CHP) facilities.
  • Supporting the redevelopment and reutilization of idle pulp and paper mill sites, by pursuing new market opportunities, local economic development, and community goals.
  • Working with Maine forest economy communities to amplify and accelerate local and regional efforts around economic diversification. 

I already find myself fielding more and more calls from investors interested in the State of Maine and they’re coming from all across the country. People really are looking at our forests but they’re also comparing it to other parts of the nation and the world.

By working with communities, the industry and the university, we’re going to have some great ideas about the future forest economy. We encourage all stakeholders, including current state officials and candidates, to stay in touch with us as we go through this process.