Why No One Can Solve the Conservation Funding Dilemma

Why No One Can Solve the Conservation Funding Dilemma

Lawmakers, agency professionals, and manufacturers of hunting and fishing gear have crafted countless ways to pay for state and national conservation programs since passing the Pittman-Robertson Act in 1937.

But countless others since then have buried legislation, forsaken promises, and withheld funding that could have launched and maintained many long-lost conservation initiatives.

Yes, hunters, anglers, and trappers proudly embrace North America’s model of wildlife conservation, and the time-tested “user pay—public benefits” system that funds the United States’ fish and wildlife programs. Roughly 16 million hunters and 55 million anglers help bankroll America’s system of conservation funding when buying annual hunting and fishing licenses. Hunters, anglers, and other gun owners also indirectly pay federal excise taxes (FET) on hunting and fishing equipment specified by the Pittman-Robertson (P-R) Act and the fishing industry’s Dingell-Johnson (D-J) Act of 1950. The IRS collects those FET from manufacturers when they sell their wares into the marketplace, and transfers the revenues to the U.S. Fish and Wildlife Service to distribute proportionately to state fish-wildlife agencies.

Those contributions have invested over $25.5 billion into state conservation and recreation projects nationwide over the last 86 years. In addition, state agencies matched that money with about $8.5 billion, mostly from hunting and fishing license revenues. State agencies today receive, on average, about 80% of their funding through FET and license fees, but some rely nearly 100% on those sources.

Forcing the Funding

And although FET and license sales fund agencies fairly reliably, conservation programs don’t run on autopilot, and paying taxes and fees is never painless. That’s why the P-R Act’s creators made its funding methods specific and air-tight. In addition to FET, the act also requires states to create and sell hunting and fishing licenses, and forbids state and federal lawmakers from diverting any of those revenues from fish or wildlife accounts.

Meanwhile, those who buy hunting, fishing, and trapping licenses often do so grudgingly, with many reflexively resisting fee hikes. Even when state conservation groups lobby for increases, lawmakers often ignore them to score points with voters. Wisconsin, for example, hasn’t raised its hunting or fishing license fees since 2005. Western states, on the other hand, typically impose their greatest price hikes on nonvoting nonresidents.

Likewise, many hunting and fishing manufacturers dislike paying FET on their products to the IRS. FET rates today range from 3% to 11% on rifles, shotguns, handguns, ammunition, bows, crossbows, arrows, arrow points, bow-mounted accessories, and fishing rods, reels, and sundry tackle.

Today’s manufacturers aren’t the first with that distaste. Some of their predecessors opposed P-R in 1937 and D-J in 1950. And when Congress tried adding handguns and archery gear to the P-R Act in the 1960s, some archery manufacturers stubbornly lobbied against it.

Congress eventually added a 10% FET on handguns to the P-R Act in 1970, but left out archery gear. That prompted Fred Bear, the famed president of Bear Archery, to publicly back a 1971 amendment to impose an 11% tax on archery gear. Bear lobbied key congressmen, and wrote letters to every member of the Archery Manufacturers Organization, urging their support. Bear prevailed, and President Nixon signed the amendment into law in 1972.

But in the 50-plus years since Bear’s victory on Capitol Hill, Congress has seldom bolstered the P-R Wildlife Restoration or D-J Sport Fish Restoration funds by imposing FET on new generations of hunting and fishing gear. Among today’s exempt products are air-guns, air-bows, muzzleloading rifles, treestands, trail cameras, decoys, game calls, ground blinds, hunting optics, scent products, GPS devices, ice augers, underwater cameras, icefishing shelters, and clothing and footwear for hunting and fishing. The only P-R and D-J additions came in 1984 when the Wallop-Breaux Amendment imposed a 3% FET on fish-finders and electric motors; as well as fuel taxes for motorboats and small-engines, and import duties on fishing and boating gear.

Congress also did some tinkering in 2005 by closing a tax loophole that temporarily gave foreign arrow manufacturers unfair advantages. Simultaneously, it made arrow FET an annually adjusted tax. What began as a 39-cent per shaft tax in March 2005 is now 59 cents per shaft.

The same year, Congress made concessions to fishing manufacturers by reducing the FET from 10% to 3% on tackle boxes, and capping the FET at $10 for fishing rods rather than imposing the 10% fee. For example, when manufacturers sell a high-end rod to a dealer or distributor for $160, they pay the IRS $10 rather than $16.

Leaky, but Still Reliable

Still, the P-R and D-J acts remain conservation’s most reliable revenue generators. In fact, FET revenues from guns and ammo sales hit historical highs in recent years, thanks in large part to the shooting sports and self-defense markets. Those additions pushed PR-DJ contributions to wildlife and fisheries work beyond $1.5 billion in 2022 alone.

And that aid would have been roughly $17.25 million higher if not for worsening “leakages” in the now 86-year-old funding system. Dan Forster, vice president and chief conservation officer of the Archery Trade Association, said foreign manufacturers selling archery and fishing products directly to individuals through eBay, Amazon and other online outlets don’t pay P-R and D-J taxes. A recent analysis by Southwick Associates for the ATA and the American Sportfishing Association estimated the 2021 FET leak at $4.2 million for archery equipment and $13.04 million for sportfishing tackle. Forster said online sales of foreign-made ammo and firearms are basically nonexistent.

“Online sales have dramatically changed the so-called ‘rules of the game’ the past 15 years,” Forster said. “No one could have imagined or anticipated the impacts of online sales the first 70 years of Pittman-Robertson, and I doubt online retailers set out to undercut our funding system. But by selling directly to individuals, online outlets don’t deal with an ‘importer of record’ to pay the FET, and no federal law makes them collect it from individual customers.”

Working with Washington

The leaks prompted the ATA, ASA, and Association of Fish & Wildlife Agencies (AFWA) to seek help from over 50 hunting, fishing, and other conservation groups in March 2022 to push the Congress and Senate for “corrective actions.” Two groups signing onto that effort are the Theodore Roosevelt Conservation Partnership (TRCP) and Backcountry Hunters & Anglers.

Whit Fosburgh, the TRCP’s president/CEO, said the groups contacted Sen. Mike Crapo, R-Idaho, for help. Crapo, ranking member of the Senate’s finance committee, is working with the House Ways and Means Committee and the General Accounting Office to fix the leak.

“Most people in Congress support P-R and D-J, and they understand we’re all facing new challenges as we shift toward a technology-driven society,” Fosburgh said. “Once we get the report from Sen. Crapo’s office, we should have better guidance on how to fix this problem.”

Mitch King, the Wildlife Management Institute’s excise tax specialist, said it’s especially important to work with lawmakers who understand the issue, and know P-R and D-J’s importance to hunting, fishing and conservation. “Some people in Washington hear about foreign companies getting an 11% tax advantage over domestic companies, and they blame it on P-R and D-J,” King said. “Their solution is, ‘Let’s kill the tax.’ That’s our very real fear, especially when you think about the ‘RETURN our Constitutional Rights Act,’ which tried to abolish Pittman-Robertson last summer.”

The RETURN bill, introduced in June 2022 by freshman Rep. Andrew Clyde, R-Georgia, stands for “Repealing Excise Tax on Unalienable Rights Now.” Clyde found 51 GOP co-sponsors for his bill, and he called the P-R Act a “treacherous threat that seeks to weaponize taxation to price (Second Amendment) rights out of the reach of average Americans.” Clyde’s bill hasn’t advanced since being referred to the House Ways and Means and Natural Resources committees.

John Gale, BHA’s vice president of policy and government relations, said few bills or tax loopholes are quickly passed or fixed, given their complexities. “First, you have to really understand the issue, and then seek ideas and compromises that create something lasting,” Gale said. “We’re finding a lot more members of Congress who want solutions, but it all starts with good-faith discussions and negotiations.”

Archaic or Enduring?

Meanwhile, whether the Pittman-Robertson and Dingell-Johnson acts seem archaic or obsolete in today’s e-commerce world, no other conservation funding systems have proven more enduring and consistent. Yes, other state and national conservation programs regularly surface, but few receive legislative approval and those that do often lack funding.

One exception is the Great American Outdoors Act, which President Donald Trump signed into law in 2020. The GAOA fully and permanently funds the Land and Water Conservation Fund (LWCF) at $900 million annually, and provides $9.5 billion over five years for the U.S. Park Service’s long-delayed maintenance projects.

Although Congress passed the LWCF in 1965 and directed it receive $900 million annually in oil/gas lease fees for offshore extractions, the fund seldom received the full appropriation. That’s because Congress poached the LWCF every year except two from 1965 through 2020. By the time the Interior Department distributed its annual grants, Congress had already diverted the lease fees to things the LWCF’s authors never intended.

Unfortunately, another ambitious federal program called the Recovering America’s Wildlife Act (RAWA) died in December 2022 when the U.S. Senate failed to take up the $1.4 billion bill after it passed the House. RAWA would have funded local and state projects to conserve and restore wildlife habitats, fight invasive species, reintroduce native species, help nongame birds and wildlife, and fight emerging diseases.

State fish and wildlife agencies would have used about $1.3 billion through RAWA to carry out congressionally mandated wildlife plans with help from state-based conservation groups and programs. The remaining $97.5 million would have funded wildlife conservation efforts by native American tribes. RAWA died despite evolving from decades-long efforts like the $350 million Conservation and Reinvestment Act (CARA) of 2000 and “Teaming with Wildlife.” In fact, Teaming with Wildlife was first proposed in 1975 and popped up repeatedly for nearly 50 years despite never finding a reliable funding source.

Its failed proposals included a controversial “backpack tax,” which mimicked P-R and D-J by recommending FET on binoculars, camping gear, and birdseed to create a “hands-off” fund for other conservation and environmental programs. But gear manufacturers in those “non-consumptive” recreational activities opposed the FET, saying they were already paying too much in federal tariffs, and state and local taxes.

That’s largely why RAWA backers—much like CARA and Teaming with Wildlife supporters before them—sought funding through offshore oil- and gas-leasing revenues, just as the GAOA secured two years earlier.

Abandoned at the Altar

King, the WMI’s excise-tax guru, said he wasn’t surprised when RAWA didn’t make it into the $1.7 trillion omnibus bill signed Dec. 30 by President Joe Biden. King said the quest for pain-free RAWA funding was doomed from the start.

“You’d think Charlie Brown would know by now that Lucy’s going to pull the ball away before he can kick it,” King said. “I don’t know how long it will take the conservation community to realize we can’t rely on lawmakers to vote for a bill just because they signed on as co-sponsors. Nearly every conservation group in this country was backing RAWA, and after they counted the bill’s co-sponsors, they thought RAWA had the votes to pass the Senate.

“They forget that all revenues from those oil and gas leases still go into a federal kitty,” King continued. “We think our programs are the most deserving, but conservation organizations are just one of many groups competing for the same money. So, when all those senators co-sponsoring RAWA looked at all the other programs targeting that kitty, they quietly quit on RAWA. The senators still went home and told their voters they sponsored RAWA, because they never actually voted for or against it.”

Given such disappointments, some states created their own gear-specific taxes. Texas’ sporting-goods sales tax generates up to $168 million annually, and dedicates it to the state’s Parks and Wildlife and Historical Commission agencies. In Georgia, the Outdoor Stewardship Act taxes outdoor recreation equipment to fund a conservation trust for its priority lands, local parks and preserves, and stewardship projects in state parks and wildlife-management areas. Virginia, meanwhile, has had a 2% dedicated sales tax on hunting and fishing equipment since 2000. The tax generates up to $13 million annually for the state’s Game Protection Fund.

In contrast, when the Washington Legislature in February 2019 considered a 0.2% sales tax on outdoor recreational equipment, it abandoned the idea after meeting “vigorous opposition” from the outdoor retail industry.

Still other states use tax checkoffs, lottery revenues, fractional sales taxes, conservation bonds, “sin” taxes, habitat stamps, matching grants, trust funds, specialty license plates, and one-time budget surpluses from COVID-19 relief funding to create broader conservation funding sources.

But those revenue streams aren’t bullet-proof, either. Montana voters, for instance, backed a 2020 referendum to legalize marijuana and use about half the tax revenues from cannabis sales for conservation programs like Habitat Montana. But when Gov. Greg Gianforte released his proposed budget in December, it didn’t include the $30 million in projected tax revenues. State conservation groups are fighting that switch, noting it ignores the reason they supported the referendum.

But cannabis sales aren’t necessarily easy to forecast. When Colorado legalized recreational marijuana use in 2014, it imposed a 15% sales tax. The state collected $423 million in cannabis-related sales taxes in 2021, but those revenues fell 23% to $325 million in 2022, pinching public funding for housing, education and other programs. And six months after California legalized recreational marijuana sales in late 2016, its cannabis tax revenues fell 45% below projections during the first six months of sales.

Justifying New Sourcing

Then again, a major reason state and federal agencies and conservation groups continually explore new funding sources is declining hunter numbers and license sales across the eastern two-thirds of the U.S. Though the average state wildlife agency receives 80% of its funding from hunters and anglers, only 4% to 5% of U.S. citizens hunt and roughly 17% fish. Further, the force behind record-setting P-R revenues the past decade is less about hunting and more about skyrocketing sales of ammo and firearms for recreational shooting and self-defense.

Meanwhile, about 36% of Americans are into wildlife watching. And although these pastimes generate over $30 billion annually, little goes toward conservation. Unless the “watchers” and watching-related industries lobby Congress to change things, hunters, anglers and hunting/fishing manufacturers will remain the nation’s largest and most reliable source of conservation funding. In 2020 alone, the P-R Act generated $614 million in wildlife funding, and the D-J Act generated $660 million for fishing; while hunters spent $902 million on hunting licenses, and anglers spent $752 million on fishing licenses.

King concedes the internet exposed weaknesses in the P-R/D-J funding methods, but said it remains the fairest, most reliable system for expanding nationwide conservation funding. “If we didn’t have Pittman-Robertson and Dingell-Johnson the past 30 years, our conservation programs would be dead in the water,” King said.

Expanding that effort, however, will require even broader public support. “We won’t get far in Washington until birdwatchers, for example, tell their senators and representatives they won’t buy bird seed or binoculars until lawmakers tax those products on behalf of conservation,” King said. “It’s not easy to get bills through Congress, but it can be done.”

Forster agrees. “Statesmanship still matters,” he said. “Leaders like Fred Bear understood that industries must work with Congress to create a fair tax system that invests in everyone’s future. But the further we get from our core hunting, shooting and fishing foundations, the tougher it’s been to find statesmen who understand how that investment also benefits those paying it.”

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