Forest Service

Generating revenue is not a priority for the Forest Service. Increasingly, legislative and administrative decisions and judicial interpretations of statutory requirements have required the agency to shift its emphasis from uses that generate revenue, such as producing timber, to those that do not, such as protecting species and their habitats. Moreover, the law requires the Forest Service to provide certain goods and services, including recreation sites, hardrock minerals, and livestock grazing, at less than fair market value. Moreover, some legislative provisions also serve as disincentives to either boosting revenue or decreasing costs. Given a financial incentive and the flexibility to explore innovative entrepreneurial ideas and more businesslike practices, the Forest Service can and will increase revenue. For example, the recreational fee demonstration program allows the agency to test new or increased fees at up to 100 sites and to keep the revenue to meet unmet needs for visitor services, repairs and maintenance, and resource management. Gross revenue from recreational fees on the national forest increased 163 percent during the program's first two years. The administration plans to forward legislative proposals to Congress, and the Forest Service is considering other legislative changes, that would allow the agency to collect, retain, and spend more fee revenue. However, allowing Forest Service managers to keep and spend all or part of the money they collect would involve risks and difficult trade-offs. In particular, the Forest Service is still far from achieving financial and performance accountability and cannot accurately account for how it spends money and what it accomplishes with it. Allowing the agency to collect, retain, and spend more of the revenue generated by goods and services on the national forests would also require difficult trade-offs between boosting revenue and other values, such as providing access to public lands, promoting the economic stability of historic commodity uses, and setting aside more lands for resource protection and conservation.

GAO noted that: (1) legislative and administrative decisions and judicial interpretations of statutory requirements have required the agency to shift its emphasis from uses that generate revenue, such as producing timber, to those that do not, such as protecting species and their habitats; (2) the Forest Service is required by law to continue providing certain goods and services at less than fair market value; (3) certain legislative provisions also serve as disincentives to either increasing revenue or decreasing costs; (4) because the costs are funded from annual appropriations rather than from the revenue generated, the agency does not have an incentive to control costs; (5) when Congress has provided the Forest Service with the authority to obtain fair market value for certain uses, or to recover costs for services, the agency often has not done so; (6) as a result, the Forest Service forgoes at least $50 million in revenue annually; (7) given a financial incentive and flexibility, the Forest Service can and will increase revenue; (8) for example, the recreational fee demonstration program, first authorized by Congress in fiscal year (FY) 1996, allows the agency to: (a) test new or increased fees at up to 100 sites; and (b) retain the revenue to help address unmet needs for visitor services, repairs and maintenance, and resource management; (9) by allowing the agency to retain the fees collected, Congress created an incentive for forest managers to emphasize fee collections; (10) gross revenue from recreational fees on the national forests increased from $10.0 million in FY 1996 to $26.3 million in FY 1998; (11) the administration plans to forward legislative proposals to Congress, and the Forest Service is considering other legislative changes that would allow the agency to collect, retain, and spend more fee revenue; (12) however, allowing forest managers to retain and spend all or a portion of the revenue they collect would involve risks and difficult trade-offs; (13) in particular, the Forest Service is still far from achieving financial and performance accountability and thus cannot accurately account for how it spends money and what it accomplishes with it; and (14) allowing the agency to collect, retain, and spend more of the revenue generated by goods and services on the national forests would also require difficult trade-offs or policy choices between increasing revenue and other values and concerns.