County payments stay alive under bi-partisan proposal

October 8, 2011

In a rare display of bipartisanship at the national level, Oregon's congressional delegation along with Gov. John Kitzhaber have agreed on legislation that would extend federal payments to Oregon's beleaguered timber counties for another five years.

The payments, delivered under the Secure Rural Schools Act, will to run out in December if not renewed, as the program technically expired on Sept. 30.

The county received around $2 million in the 2010-11 fiscal year. Of that, around $1.4 million went to the county roads fund, around $500,000 went to Hood River County schools and $150,000 to county sheriff search and rescue operations.

Funding that counties receive has been steadily dropping over the decade the program has been in effect, and the county roads department budgeted in around $700,000 for the funds this year.

While the money has been dwindling, it still remains a key funding source for the many Oregon counties that have substantial amounts of forest land owned by the federal government within their boundaries.

Without the payments the 2012-13 county budget for roads "would be a big fat blank line and we would have to start tapping into our reserves," said County Budget Director Sandra Borowy.

Kitzhaber was in Washington over the past week to meet with Oregon's congressional delegation with funds set to run out soon and several Oregon counties saying they could face bankruptcy without them.

"This gives us breathing room to figure out a long-term solution on the ground," said a spokesman for Gov. Kitzhaber's office.

The legislation is expected to be introduced in the Senate next week by Natural Resources committee chair Jeff Bingeman, D-New Mexico, and would authorize the payments for five more years with an annual reduction of 5 percent over the prior year's funding each year.

"This is a program of huge importance to Oregon," said Jennifer Hoelzer, a spokeswoman for Sen. Ron Wyden.

Wyden co-authored the original county payments bill in 2000 and also helped get it renewed in 2008.

While the legislation has bipartisan support both in Oregon's delegation and in the Senate, getting it through the House could be problematic.

The proposal is not budget-neutral and could generate significant opposition from Republicans.

"There are challenges of finding a way to pay for this," said Andrew Whelan, spokesman for Rep. Greg Walden of Hood River. "There are certainly going to be budget challenges."

However, Hoelzer said that in Wyden's office "bridge funding is priority number one" and that the legislation's original author was determined to see the short-term funding pass.

"Getting anything through Congress takes some effort but we think we can get it attached to something that will pass the house," Hoelzer said.

Walden, the lone Republican in Oregon's delegation, and Rep. Peter DeFazio had been working in the house Natural Resources Committee for a long-term solution, but the entire delegation agreed a funding extension was necessary while a more long-term solution was sought.

"There is widespread agreement and desire to identify a long-term solution," Whelan said. "The counties have been pretty vocal that they don't want to operate on the current model or the status quo - which means them going to the feds and getting them to write a check that is not always going to be there."

In September, Walden proposed legislation that would reduce federal forest logging regulation and allow counties to sell the timber and create a trust fund.

However, Headwater Economics, a Montana-based research firm, found the plan would actually dramatically increase federal spending and would require a dramatic increase in timber production from national forests.

When the program was renewed in 2008, it was with the understanding that a long-term solution would be found, but three years later the program is again facing a short-term renewal and counties are faced with an even smaller infusion of cash into their budgets.

Whelan said Walden remained confident that a long-term compromise could be reached before the payments run out after the proposed renewal and that it must involve a way to allow the timber counties to grow their economies.

"The idea that these economies could just transition in five years in not reasonable when 80 percent of the land is owned by the federal government," he said.

Without the payments the county would be dipping into its already strained reserve fund to keep up road maintenance, a large portion of the search and rescue budget would be gone and the Hood River County School District would be faced with laying off between six and 10 positions.

"Unfortunately since we have cut so much from everywhere else, pretty much anything we cut now would be in terms of bodies," said HRCSD Finance Director Nick Hogan.

Even if the program is renewed, the funds are going to continue to dwindle. The amount budgeted to roads was cut in half this year, and Borowy does not expect the number to improve.

"We are expecting it to be even lower," she said. "Frankly we've been lucky they've renewed it twice."

Oregon's southwestern timber counties are facing a particularly devastating situation if the payments dry up, as the payments go into - and make up a substantial potion of - their general funds.

"It's critically important," said Kitzhaber spokesman Tim Rafael, adding that several of the counties could be facing bankruptcy.

The Oregon delegation is hoping that message resonates in congressional chambers not inclined to pass any further spending without offsetting cuts.

"If we don't get the funds the counties will be in a desperate situation," Hoelzer said. "This is a must-do."

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