Feds demand state give back $200K paid by Forest Service

May 3, 2013 The Associated Press

WASHINGTON -- The U.S. Forest Service is in the business of preventing fires, not starting them.

Yet the agency set off alarms in Wyoming and state capitols across the West by citing automatic spending cuts as the basis for demanding that dozens of states return $17.9 million in federal subsidies. And it's all come down to a bureaucratic squabble over whether the money is subject to so-called sequestration because of the year it was paid -- 2013 -- as the Obama administration contends, or exempt from the cuts because of the year it was generated -- 2012 -- as the states insist.

Right now, it's a standoff heightened by history and hard fiscal realities. But with taxpayer cash scarce, both sides are digging in: The Forest Service has to slash 5 percent of its budget under sequestration. The states, meanwhile, have depended for decades on a share of revenue from timber cut on federal land. Perhaps least willing to compromise are members of Congress who are up for re-election next year and are loath to let go of money that benefits potential voters back home.

It's not clear who gets to decide or whether the question ends up in court. But lines have been drawn.

"We regret having to take this action, but we have no alternative under sequestration," Forest Service Chief Tom Tidwell wrote in March to governors in 41 states, explaining that since the payments were issued in the 2013 budget year, the money would be subject to sequestration.

Infuriated, Republicans and Democrats from Capitol Hill to the governor's offices banded together to fight back, arguing the money was paid to the states well before the spending reductions went into effect. The governors of Alaska and Wyoming have flat out refused to send the dollars back.

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