Representative Dennis Richardson: Timber Counties Face Insolvency

Oregon Timber Counties Face Insolvency

A bleak financial future looms ahead for many Oregon timber counties, especially Josephine and Curry. Last week an extension of timber replacement funding was scrapped when Senator Wyden’s Amendment to a Senate bill was denied for procedural reasons. Today, Congressman Greg Walden proposed what may be the last hope for an extension of federal timber replacement revenues in his, “Security and Energy for America Act,” which provides “payment in lieu of taxes (PILT) funding for timber counties, as part of a comprehensive solution to America’s dependence on foreign oil.

For decades timber counties, primarily in the western states relied on a share of federal revenues obtained from timber harvests on lands within their county boundaries. With reductions in timber harvests in the 1980’s and 90’s, timber revenues to counties were greatly reduced. To fill the gap, in 2000 Congress passed The Secure Rural Schools and Community Self-Determination Act (PL 106-393). This Act was intended to temporarily compensate timber counties and schools for lost revenues in 42 states. (For a summary of the effects on Oregon counties, click here.) With the termination of federal timber replacement money, Josephine County will lose 67% of its revenues, and Curry County will lose 60% of its revenue. Although counties cannot legally go bankrupt, if they run out of money, they are forced to shut down services. The consequences to public health, public safety and public services for the residents in Jo and Curry counties will be dramatic.

The options in the short run are few. The average permanent real property tax assessment for Oregon’s 36 counties is $2.80 per thousand dollars of assessed value. Josephine County’s permanent real property tax base is only 59 cents per thousand–1/5 of the $2.80 state average. Curry’s R.P. assessment is only 60 cents per thousand. With Jo and Curry County residents paying only 1/5 of the state average, there is little motivation for legislators from non-timber counties to rush financial aid to Jo and Curry Counties. Nevertheless, Governor Kulongoski has taken seriously the impending financial disaster by organizing the Governor’s Task Force on Federal Forest Payments And County Services. Yesterday, this Task Force announced 54 recommended actions that could be taken to help the troubled counties.

Since it is unlikely Josephine or Curry County property owners will vote to increase their property tax assessments by 500%, the commissioners in both counties face a bona fide, real-life financial crisis. The federal timber replacement money ends effective, today, July 1, 2008. Without an infusion of federal. state and county money Jo and Curry Counties may be forced to terminate many governmental services within a year. The date of insolvency could depend on budget busters like unexpected costs to fight a large forest fire, continuing increases in gasoline and energy costs, or one or more negative verdicts in pending law suits.

Some believe insolvency is inevitable. Even if they are correct, it is unlikely the state will intervene until county commissioners turn out the lights, close the doors and mail the keys to the Governor. Seriously, when the funds run out, county commissioners will be forced to shut down government services one by one. A timber county commissioner told me this morning that without an infusion of revenue his county would have to look to the state to take over work performed by the County Clerk, Tax Assessment, Building dept, Juvenile Justice, District Attorney’s office, Law enforcement and even the county jail. If and when a county notifies the State that it can no longer provide for the public safety or public health, the State will be forced to respond.

The ultimate response would be to dissolve the insolvent county and make it part of a contiguous county. In that event, the property owners from the old county immediately would find their properties reassessed at the tax rate being paid by the land owners of their new county. In Jackson County that rate is $2.01 per thousand of assessed value. In Douglas County the levy is $1.11 per thousand.

At that point the old county citizens would have a window of opportunity to call for a special election and vote to voluntarily increase their old county’s R.P. tax assessments to a level sufficient to cover bare-bones government services. But, even that might not be enough. Josephine County’s sheriff is proposing a temporary district levy that would increase Jo County’s tax levy to $2.09 per thousand. At that level only enough additional money would be generated to cover county law enforcement, without a dime for juvenile justice or the D.A.’s office.

Long term, real property taxation is an unsustainable revenue source for all Oregon cities and counties. With the 3% annual real property tax assessment limitation, real property taxes no longer can keep up with the rising costs of city and county governments. For instance, the cost of gasoline for patrol cars, tar and asphalt for road construction and repairs, and health and retirement benefits are inflating much faster than the 3% maximum allowable increase in annual property tax assessments. In addition, more and more property is being moved off the tax roles via conservation easements and non-profit organizations, not to mention the properties delinquent in paying their property taxes. The result is real property taxes are declining every year as a percentage of city and county revenues and will continue to do so.

What can be done?

Is there a way to provide sufficient revenues for our cities and counties without taxing citizens””especially those on fixed incomes””out of house and home?

I believe there is a solution”¦one that requires vision, courage and bipartisan cooperation. Last year, I proposed such a solution in the newsletter entitled, “A Tax for a Tax.” (Click here to read) It contained a survey that asked the following question: “Would you be willing to trade the property taxes Oregonians pay on their homes, small farms and businesses for a broad-based, Constitutionally restricted 5% Retail Sales Tax?”.

The results of the survey showed 87% supported the proposal.

In a nutshell, a tax reformation proposal with 87% positive acceptance rate among Oregonians, regardless of party or political philosophy, is worth careful consideration. It would require a Constitutional Amendment that exempts homes, small farms and businesses from property taxes, and institutes a broad-based 5% sales tax. Whether the exemption amount is $10 million or $5 million, the net effect is to increase state revenues by capturing taxes from those who are currently not paying their “fair share,” while ensuring local city and county governments have a new, preferential source of revenue that will increase over time with Oregon’s economy. In sum, the rising water of Oregon’s future economy will float all municipal boats, as well as the ship of state. I explain in the newsletter why this approach is appealing to liberals and conservatives, although for different reasons. If the drafters of the Amendment stay focused on the goal and do not become greedy, this concept will protect and enhance revenue for local governments while substantially increasing revenue for the state.

Hopefully, members of the Governor’s Task Force on Comprehensive Revenue Restructuring have accepted the fact that merely adding a third leg to the proverbial stool will not be acceptable to a majority of Oregon voters””voters who gleefully remind legislators that the sales tax has been defeated 9 times already.

The fatal flaw for the Task Force may be in not providing a sufficient level of R.P. tax exemption. Currently, the Task Force’s proposal is to lower the exemption from my recommended level of $10 million to only $1 million. In so doing it risks losing the support needed from conservatives, whose support will be required to enable such a reformation of Oregon’s tax structure to get a majority vote on the Constitutional Amendment. If Oregon’s lawmakers want voters to approve a plan that provides a solid, dependable source of funding for our cities and counties while increasing revenues for the state, it can implement a Constitutionally restricted sales tax only by exempting the real property tax from the homes, small farms and businesses of all Oregonians. In short, it must trade”¦A TAX FOR A TAX.

Sincerely,

Dennis Richardson
State Representative

P.S. If you would like to send your opinion on “A Tax For A Tax” to the Governor’s Task Force on Comprehensive Revenue Restructuring, feel free to contact the Committee Administrator at: [email protected]

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  • eagle eye

    An intelligent view of the situation. I especially like the recognition:

    “Long term, real property taxation is an unsustainable revenue source for all Oregon cities and counties. With the 3% annual real property tax assessment limitation, real property taxes no longer can keep up with the rising costs of city and county governments. For instance, the cost of gasoline for patrol cars, tar and asphalt for road construction and repairs, and health and retirement benefits are inflating much faster than the 3% maximum allowable increase in annual property tax assessments.”

    The TABOR-like Measures 5, 47, 51 have put the property-tax reliant entities in a long-term bind, and Richardson really hits the nail on the head in explaining why.

    Shorter term, though, these insolvent counties are just going to have to decide: do they want to function or even exist? If so they are going to have to pony up more money like the rest of the counties do.

  • Steve Plunk

    I too appreciate the level headed, reasonable look at this problem by Rep. Richardson. Unfortunately I cannot support the idea.

    The plan requires us to trust the legislature to make this revenue neutral. I can’t see the Dems who control the process as trustworthy. With any tax change we will see winners and losers. Why should some reap the benefits while others get the short end of the stick? The status quo is our safest bet.

    The other problem is later manipulation of the tax rate. History has shown us sales tax rates climb. All the promises in the world cannot bind this tax to 5%. As needs increase (don’t they always?) the tax rate will go up and up.

    Oregon voters have shown in numerous elections they don’t want a sales tax. I expect they still don’t want a sales tax.

    There is no question these counties are in trouble. The concept of self government demands the residents themselves solve the problem. I don’t see a statewide change necessary for the two counties facing this shortfall. Again, it all goes back to no trust in the state government. Without that trust we cannot get behind any sort of change.

    Regardless, I thank Rep. Richardson for his hard work.

    • David from Eugene

      Steve

      First of all it is not two counties it is at least three as Lane County has a similar revenue short fall caused by the decline in O&C revenues and the end of the Secure Rural Schools program.

      The situation is that these Counties cannot solve the problem. They are precluded by the property tax law changes made by Measures 47/50 from raising their base property tax rate. And they cannot cut state mandated services which make up the bulk of their budgets. All they can do is cut public safety programs, and funding for parks and libraries if they provide them. In the case of Lane County, they do not operate a Library and their Parks are operated on parking and user fees so the cuts are in public safety. We have a jail with about 1/16 of the capacity it should have, a parole and probation department overloaded to the point of ineffectiveness and a DA’s office that effectively no longer prosecutes misdemeanors or property crimes. And that is the current budget, next years will be worse.

      Because of the practice of internal billing, a good cost control method, and the large amount of state and federal money that passes through their budgets to fund mandated programs most County budgets look much larger then they actually are. Toss in the fact that much of the public does not understand the limited fungibility of most of the money in a county budget, and the irresponsible rhetoric that has accompanied most of the recent tax cutting measures that alludes to, but does not list, the existence of fraud, waste and abuse in public budgets. And to this all add in the large number of people who want public services, but do not want to pay for them and one can see why their attempts to either get limited operating levys or impose new taxes have failed.

      In many respects these Counties are the proverbial canary in the mine shaft, in time all the Counties in Oregon will be in a similar predicament as the cost of providing governmental services in Oregon is going up at the rate of about 6% a year and revenues are limited by law to a 3% increase. The only difference between these Counties and those in the rest of Oregon is that thanks to reduced timber production on the O&C Lands and the end of the Secure Rural Schools they just got into the fiscal crises faster then the rest.

      • eagle eye

        David, the situation in Lane County is not as dire as the worst counties. Lane will lose about a third of its general budget, bad enough.

        I don’t believe it is the case in Lane County that they have maxed out the property tax. There were ballot votes a few years back on raising the county property tax and it got voted down — mostly due to the rural voters.

        I for one was amazed to see how little of my property tax goes to Lane County, about 10%. I would be willing to pay more — something closer to what people in “normal” Oregon counties pay. Including not having the absurdity of having to buy a parking permit at the county parks.

        As I noted elsewhere, eventually the TABOR-like property tax limitations are going to strangle the local governments. (Maybe that was the idea). But I don’t think we’re maxed out in Lane County yet.

        Also, I would be open to the possibility of cutting the city of Eugene taxes a little to give some relief to the county budget.

        • David from Eugene

          Eagle Eye

          You are correct that there is enough room under the Measure 5 property cap to permit a modest operating levy to pass with out triggering across the board compression. But an operating levy is not exactly the same thing as an increase in the base property tax rate. The revenue from a levy lacks flexibility; it can only be spent on those programs or governmental functions it is adopted to support. And a levy must be reapproved every 4 years. They can be established to run for 5 years but the double majority requirement effectively has effectively limited them to 4. This results in multiple money measures on the November General Election Ballot. While a particular voter may only be affected by one or two, he will likely do to the limited number of media markets in Oregon hear of many more; making passage of any one more difficult.

          There is one other problem with using operating levys to fund something like law enforcement, because they are temporary, the positions they fund can be perceived as also being temporary. This discourages good people from applying for these positions. Why take a job that may only last 4 years when this other position offers a full career.

          You are right about Lane County’s base tax rate being low; it is $1.275 per one thousand accessed value. Unfortunately that fact escapes many tax payers, particularly when they make out their property tax checks to the Lane County Tax Accessor’s Office for much more then that. There is a part of Downtown Eugene that is paying over $29 dollars per thousand.

          As to cutting Eugene’s tax rate, I am not sure I would support it, with the exception of the two Urban Renewal Districts, and the Enterprise Zone there is not a lot of wastage in Eugene’s budget and the Police force is under strength for a city this size. Not that is currently important as the cuts at the County level limit the effectiveness of the Eugene Police Department.

          • eagle eye

            “right about Lane County’s base tax rate being low; it is $1.275 per one thousand”

            So basically it sounds like you agree that Lane County voters could take care of things here if they wanted to, at least for the time being. But they don’t want to. It’s going to take a crisis to force them to make up their minds and possibly change. But it may be that nothing will change their minds. That’s their prerogative. Personally, it will not be the kind of county I will want.

            I’m not sure I agree with the part about there not being a lot of waste in Eugene city government. A few years back, the Eugene Weekly (!) reported that Eugene had far more city employees per capita than other Oregon cities like Salem. I have no idea if this is really true or what it really means. But I do see the City of Eugene doing some really goofy things that cost real money. Like spending $2 million recently on plans for a new city hall that isn’t possibly going anywhere.

  • Crawdude

    They had 8 years to prepare for this, instead, many of the counties choose to grow their local governments. I, see no reason the citizens in the counties that did not, should have to pay for those counties short sightedness.

    Some of these counties did not invest the timber money in growing government. They used it on items that they knew they could easily cut when the time came.

    I’ll stick with the property tax, it and my income tax are both deductible. With the sales and income, it is an either or deal.

    Either way, I won’t vote to raise either!

    • David from Eugene

      Crawdude

      The Lane County Commissioners have been preparing for this situation. They have been trimming their budget, cutting jobs and reducing programs. And in some ways these actions have made the current situation worse, as there is no more fat to cut, only essential programs mainly law enforcement.

      • eagle eye

        I agree, it is hard to see how Lane County could have acted much more responsibly. I know from personal contact that some of the top law enforcement people have simply thronw in the towel.

  • John Galt

    My major concern is that the property tax is a relatively stable tax that does not ebb and flow as much as the economy turns while a sales tax would do just that, much like the income tax. Cities and Counties currently enjoy some semblance of stability due to the property tax. Unfortunately, some of these low tax counties are going to have to raise there property taxes or go under. Exchanging the sales tax for a property tax is a bad idea. A better idea would be to exchange the income tax for a sales tax.

  • RinoWatch

    Dennis,

    Read my Lips (writing)

    NO SALES TAX!!! Capece?

  • Alan

    I second the motion against the sales tax.

  • Rupert in Springfield

    The problem is a logical circus in a way. I do have sympathy for the people in these counties, but lets look at the source of their problem:

    1) They are screwed because no timber revenue.

    2) Why no timber revenue? They were promised it both as part of statehood and as part of the North West forest plan, which promised sustainable logging.

    3) Well, guess what, government lied to them, they don’t get those revenues.

    4) So, sales tax? Why is a sales tax so hard to get passed in Oregon?

    5) Because no Oregonian in his right mind believes either the property tax will forever be gone, or the sales tax wont be raised at the whim of the legislature.

    6) Why would they think the sales tax could be raised or property taxes retained if its written into the constitution they cannot be?

    7) Because everyone knows that little segment with those provisions will be ruled unconstitutional if it passes, the rest will stay.

    8) Why would they think that?

    9) Because trust in state government is about zero, you think the trust in the courts is any better?

    10) And that trust is at zero, because people feel they have been lied to, which is what got those counties into this mess in the first place.

    Moral – When confronting a vile stain on the floor, only a fool believes the dog left the room to fetch a mop.

  • Rupert in Springfield

    Sorry for the smiley face. I hate the smiley face. There is only one policy of the Taliban that I ever agreed with, the death penalty for emoticons.

    I have no idea how it got there and apparently the numeral eight followed by a pranthesis generates it.

    test

    8)

  • Rupert in Springfield

    Yep, so eight followed by close paren generates an emoticon. Boy do I hate those things.

    • dean

      Rupert…thanks for figuring out the smiley face mystery. I have found that #8) exasperating.

      You say up above that the Counties were “promised it (timber revenue) as part of statehood…”

      I don’t know where you got that one. There was no Forest Service or BLM/O&C lands when Oregon formed as a state (1859,) and there were thus no timber revenues to share. The Feds were strictly in the take the lands from the Indians and give it to the white guys era. They had no intent to hang onto any land until the Cleveland Administration in the 1880s, then the official formation of the national forests in 1891.

      Commercial logging on FS and BLM lands did not even begin at higher than token levels until the 1950s, after private landowners had cut nearly all their trees. Thus there would not have been any timber revenues to share even if there were such a deal. Those Counties must have survived for many decades with little or no federal handouts, from timber or otherwise. What happened? I thought we had rugged, self-sufficient, hard working Sometimes-a-Great-Notion people in them thar woods. When did they go squishy?

      I have one question on the proposal by Representative Richardson. If the “average” County property tax rate across the state is $2.80 per thousand and some Counties like Curry are at only 60 cents, then that means other counties are much higher, and presumably have higher levels of service as a result (better police, roads, libraries, etc…). So if we replace this so-called average rate with a sales tax, what happens to those services funded by the higher property taxes in the higher taxed counties?

      Aren’t we robbing Peter (Multnomah County) to pay Paul (Curry)? If yes…why should M. County taxpayers vote aye? If no, then we must have magic money that only multiplies, never shrinks.

    • Crawdude

      🙂

  • Rupert in Springfield

    >You say up above that the Counties were “promised it (timber revenue) as part of statehood…” I don’t know where you got that one.

    That’s somewhat surprising as it is fairly well known. The was done generally under the Land Ordinance of 1785 and more specifically with the creation of Oregon as a territory in 1848. It became finalized under the Admission Act of 1859 and is spelled out in a number of ways in the Oregon Constitution. The history is quite clear on this, forest lands were to be maintained with a portion of the revenues going to the state. The fact that there was no Forest Service or BLM is irrelevant to the matter. Roads and schools are both mentioned in the constitution as beneficiaries of the proceeds from some of these lands. The fact that there was no Department of Education or DOT at the time does not mean that the words have no meaning and were simply put in there to use up extra ink.

    >The Feds were strictly in the take the lands from the Indians and give it to the white guys era. They had no intent to hang onto any land until the Cleveland Administration in the 1880s, then the official formation of the national forests in 1891.

    White guy Indian guilt thing aside, clearly this is facetious. The federal government owns half this state. Clearly they have held onto it much longer than you think is possible. It is also quite clear they intended to do so at the outset. The Oregon Constitution spells out quite clearly that Oregon may not tax federal lands. This would not be put in there if the Federal Government had no lands. Again, it is unlikely this phrase was put in simply because the authors of that constitution had too much ink on their hands.

    >Aren’t we robbing Peter (Multnomah County) to pay Paul (Curry)?

    This is the most surprising statement in your post. I am not suggesting it is right, and in fact I am against any further subsidy to these counties. They were lied to, they need to realize that and move on. However your suggesting there is something wrong in robbing Peter to pay Paul belies a rather selective form of liberalism on your part. Wealth redistribution, the concept that it is government and not the individual who should decide the best use his money, is the corner stone of liberal thought. Why would robbing peter to pay Paul not appeal to you? Why does it make any less sense to take money from Portland, and give it to these counties than it does to take money from the productive and give it to those on welfare?

    • dean

      Rupert…I think you need to brush up on your history. The federal government right after the Rev. War “owned” a vast chunk of land between the Appalachians and the Misissippi River. That was Indian land, not yet settled by whites. They decided to use this land as a cash cow, but not by keeping it. By selling it.

      After the Louisiana purchase the domain extend across much of the west, expanding further after the Mexican War, and the treaty that established the Oregon Territory. All along…no timber revenue. The only revenue was from selling the land off. A portion of each township was reserved to the states under the Morrill Act of 1862, 3 years AFTER Oregon statehood. This act reserved “non-mineral” lands for states proportionate to the 1860 census. Proceeds from the sales of these lands were “earmarked” for supporting what became the land grant colleges (Oregon State in our case).

      1 billion acres of land was taken by force, stolen, or “neogtiated” away from Indian people and transferred to white people in the 19th century. Its not about “guilt,” its about our nation’s historical reality.

      “Timber lands” were not even recognized as such by the federal government for its first 100 years. Land was either classified as suitable for farming or not suitable. That was it. In order to buy or claim land from the feds, one had to use it for agriculture. Any other use was considered fraudulent. Cutting trees other than for conversion to ag was considered illegal. Land “fraud” was rampant, particularly deforestation.

      The “Timber Culture Act” was passed by congress in 1873, followed by the “timber and stone act” which allowed sale of lands for forestry rather than farming.There was also a mining law act passed in I think 1872 that specified selling lands away for that purpose.

      Other lands were granted to states as part of their admission to the nation. But it was not until 1891 that the President (Cleveland) authorized the setting aside of “forest reserves ffrom the PUBLIC DOMAIN. In other words they stopped getting rid of these lands.

      Their purpose was not spelled out until the Organic Act of 1897, which limited timber harvest to dead and dying trees. In 1906 10% of any reciepts from commercial use of forest lands were to be returned to the states or territories for public schools and roads. This was increased to 25% in 1908. In 1911 the Weeks Law authorized the feds to buy back cuttover lands in the east.

      Bottom line….no promise of “timber revenue” at statehood. That promise was much later, and only aplied to actual revenue assuming something was cut and sold. There was never any promise of any specific dollar amount.

      Counties provide near zero services to federal forest lands. Yet those lands provide space for recreation, clean water, clean air, and lots of other bvenefits to county residents. People who live in Counties with 50 cents per thousand tax rates need to grow up.

      I have no philosophical problem with “robbing Peter to pay Paul, assuming Peter is richer. I have a problem with trying to equalize revenues using one tax to substitute for another tax that is only unequal because citizens have chosen locally to make it so. If citizens in some Oregon Counties choose to go without police, jails, schools, parks, and libraries, or if they refuse to pay for these, then that decision is theirs to make. I think it is a great experiment in very limited government that we ought to proceed with. Then you conservatives will have your laboratory at long last to prove your tiresome point about how we don’t need all this government.

      • Rupert in Springfield

        Nice try, but unrelated historical facts establish little other than you have a lot of time to spend with Google and internet surfing. The fact that I did not cite a flurry of nonsense about the Louisiana purchase, the Mexican war, and other irrelevancies does not establish that I have less knowledge of history than you. They are irrelevant to the issue at hand, thus I did not recite them. You will also notice I did not recite the history of the Lincoln Town Car in my post.

        The fact remains, the Oregon constitution clearly states certain forest areas were to be maintained and the proceeds going to schools explicitly, and further states that Oregon would get a percentage of revenues from other lands. The governments actions in the intervening years between then and now act to no other purpose than fulfillment of those agreements. It is hardly credible that the Federal Government was giving Oregon proceeds from timber sales simply out of good will.

        At any rate, thanks for trying. I am glad you are having some recreation on this Fourth of July looking up historical factoids as it is very apropos. On this one though, you will pretty much have to accept defeat, the facts and the historical documents involved pretty clearly show you are simply wrong on this one. Its time for these counties to move on, they were lied to by the government and that is clearly evident. If this is their first experience with this in their lives, well, consider it a teaching moment.

        >I have no philosophical problem with “robbing Peter to pay Paul, assuming Peter is richer.

        Well, I cant say I agree with your morals, but at least you do seem to concede the use of the word rob in regard to wealth transfer through taxes. Perhaps we are making progress with you yet.

        >If citizens in some Oregon Counties choose to go without police, jails, schools, parks, and libraries, or if they refuse to pay for these, then that decision is theirs to make.

        Uh oh, I’m not sure you see it but you have really stepped in it here logically. you might want to think that statement over before making it again. Here’s why.

        You are saying basically that one county chose not to tax themselves and thus they are not entitled to receive taxes from another county to pay for their refusal to self tax. I agree with that. Unfortunately wealth redistribution is based upon entirely that premise. One group of people, generally the middle class and poor, by shear numbers deciding to raise taxes on others so that they can pay less. Obviously if one agrees with wealth transfer and progressive taxes by virtue of majority vote or politicians playing to that majority, then there is no moral dilemma in some counties paying less and having others subsidize them.

        I think your objection to having to subsidize those counties is that ugly bugaboo that we all now so well. Whether one is liberal or conservative politically, everyone is conservative in the field of their own endeavor.

        • dean

          Rupert…a book off the bookshelf. “The US Forest Service A History,” Harold K Steen….not Google this time. Surprisingly well written. One thumb up.

          I like the way you state actual historical facts as unrelated, which apparently frees you up to make up your own historical facts contradicted by the true record. You claim a historic fact not in existence: That in your words:

          the “Oregon constitution clearly states *certain forest areas were to be maintained* and the proceeds going to schools explicitly, and further states that Oregon would get a percentage of revenues from other lands.”

          I did use trusty Google to look up the Oregon Admissions Acts, which spells out the obligations of the Feds with respect to land. Not a word about forests. Not a word about revenues from land being “maintained.” It does set aside specified lands (numbered sections) to be granted to the state from the Federal domain, and it specifies that *5% of the net from sale of other Federal lands* would be given to the state to be used for public roads and other “internal improvements.” That’s it. No proceeds from timber sales, because there were no timber sales, because there were no federally managed forests, and anyway there was no one there to manage them. (See the UNRELATED HISTORICAL FACTS posted earlier).

          Or read it for yourself (it is short and not very sweet):

          https://www.leg.state.or.us/orcons/admacts.html

          With respect to the Counties, I’m not stating a moral case about income redistribution, but I am stating a moral case for local responsibility. Some taxes are raised at the Federal and State levels with the money or services trickling down to local levels. SSI is a good example. Counties can’t opt out of SSI. Nor can they opt their citizens out of paying the state income tax. Other taxes are raised (or not) locally and spent on local services. What I am objecting to from the initial post is the idea that Oregon as a whole should scrap its property tax system in favor of a sales tax system so that a few counties can avoid the hard choice to either raise their property tax rates to levels sufficient to provide presumably essential services.

          I agree with David from Eugene that we citizens voted at the state level to hamstring the counties by limiting their ability to raise the permanent property tax rate. But that does not prevent them from passing temporary levies. One local city, Happy Valley has dealt with this same issue for years. They had a 60 cent per 1000 rate locked in when Ms 47 & 50 passed, but they have managed by passing serial levies to maintain police, and by contracting with other service districts or County agencies to provide other urban services (thus getting around their own tax limitations).

          In sum…I am not opposed to taxing from the wealthier to provide services or an income boost to the less wealthy. I am opposed to foisting an unwillingness to do what can be done locally onto the larger body politic that is paying for its services. Lane County residents are not substantially less wealthy than Clackamas or Multnomah County residents. That means you, living in Lane County, need to choose for yourselves. If you want empty jails and deteriorating roads rather than a tax raise, so be it. Now that the Supreme Court has spoken you can arm yourself so you don’t need those jails. And with the price of gas….who cares about the roads anyway?

          • Rupert in Springfield

            >It does set aside specified lands (numbered sections) to be granted to the state from the Federal domain, and it specifies that 5% of the net from sale of other Federal lands would be given to the state to be used for public roads and other “internal improvements.”

            Good God, on the third or fourth round you actually finally took the time to read what we have been discussing. I’m amazed.

            I sense progress here.

          • dean

            Rupert…I suggest you go back and…as usual…read your own stuff.

            Rupert wrote (round one): “2) Why no timber revenue? They were promised it both as part of statehood…”

            Only they were not. They were not promised ANY TIMBER REVENUE AS PART OF STATEHOOD. GET IT?

            Then Rupert wrote (round two): “That’s The (sic) was done generally under the Land Ordinance of 1785 and more specifically with the creation of Oregon as a territory in 1848. It became finalized under the Admission Act of 1859 and is spelled out in a number of ways in the Oregon Constitution. *The history is quite clear on this, forest lands were to be maintained with a portion of the revenues going to the state*.”

            Only not. No mention of maintaining any forest lands whatsoever. But I agree on 1 point, the history is quite clear to others of us who look things up and read.

            Then Rupert wrote (round 3): “The federal government owns half this state. Clearly they have held onto it much longer than you think is possible. It is also quite clear they intended to do so at the outset.”

            Only the *historical record is crystal clear* that the Federal government had NO INTENTION AT ALL to hold onto vast tracks of forest land until it had a change of heart in the 1880s, more than 20 years after Oregon statehood.

            And on to round 4, when Rupert wrote: “The fact remains, the Oregon constitution clearly states certain forest areas were to be maintained…”

            Only “the fact” does not remain, because it NEVER EXISTED IN THE 1ST PLACE. What remains is your stubborn and increasingly ineffective, soon to become embarrassing inability to admit error. The Oregon constitution, or at least the Admissions Act, says nothing, zero, nada, zilch, nicht about “certain forest areas being maintained.” That is unless you can point to where it says so. Merely asserting its existance is not sufficient.

            Since no one wrote anything about any federal forest lands, their management, or revenue sharing from timber harvest, there was thus NO PROMISE TO SHARE TIMBER REVENUES AS PART OF STATEHOOD. Do you AGREE or DISAGREE with that statement Rupert?

            Further…there were apparently NO REVENUES TO SHARE from the O&C lands specifically until the 1950s. So if Counties had been relying on that 50% windfall from the time of statehood, they had a very long wait indeed.

    • David from Eugene

      The historic background to the current fiscal crisis these Oregon Counties are in dates back to the 1860,s and the formation of the Oregon and California Rail Road Company.

      In the 1860s the Oregon and California Rail Road received a land grant in the amount of about 4 million acres to pay for the construction of a railroad over the Siskiyous to California. The terms of the grant required that this land be sold to actual settlers at $2.50 an acre in parcels less then 160 acres. Because it was in private ownership all of this land was on the property tax rolls of the various counties it was in.

      The O&C and later the Southern Pacific Railroad (who had assumed control) engaged in various frauds and shady practices in the sale of this land resulting in a public scandal. This resulted in a federal investigation during President Theodore Roosevelt’s administration resulting in numerous arrests and the eventual passage of the O&C Reinvestment Act of 1916 which returned over 2.4 million acres of unsold lands in Oregon to federal control. Because of this take back 2.4 million acres were removed from county property tax rolls. A provision of this act provided that these lands be managed for the purpose of timber production and that part of the proceeds from this production go to the Oregon Counties whose tax rolls reduced by the take back. In its most current form 25% of the revenues go into the US Treasury, 25% to BLM to manage the lands and 50% to the counties.

      These counties incorporated this funding into their budgets and because these funds eliminated the need to impose high property taxes these counties didn’t. The adoption of Measures 47/50 permanently fixed these county’s property tax rates at these artificially low levels.

      The Northwest Timber Plan drastically limited the revenues these Counties received from O&C lands. As a result of lobbying by these Counties and other counties through out the Country is similar situations the Secure Rural Schools and Community Self-Determination Act of 2000 was passed. This act provide for direct federal payments to the affected counties. That act expired last year, creating the current fiscal crisis in those counties.

      • dean

        David, I agree with your historical summary on the O&C lands. Questions:

        1) What was the property tax rate on those O&C lands before they were taken back by the Feds?
        2) What was the timber harvest level historically (pre- WW2)?
        3) What would the property taxes be today if that land were in private ownership?

        I think #3 is particularly important in that commercial forest lands pay very little in county property taxes. The trees are “tax deferred,” and only income tax plus a very small severance tax is paid at harvest time.

        I understand that the affected counties can raise their taxes under M47 & 50 as temporary operating levies. Has there been any attempt over these past mumber of years since the Northwest FOREST (not timber) plan went into effect by these Counties to establish operating levies, or to initiate any state wide effort to modify M47 * 50?

        If the Feds simply continue to allocate in lieu of funds year after year, then why would the Counties ever take any initiative to raise their tax rates? Its a difficult transition, but has to be made sooner or later, and sooner already passed.

        The sad fact is that those are federal lands, subject to all federal laws, including ESA and Clean Water Act. Business as usual (past) is not a legal option for BLM, nor is it a politically doable option.

  • Jerry

    One thing all you naysayers are forgetting about the sales tax. All the tourists will pay most of the bill and we will get all their money for free everytime they visit.
    Sales tax is fair, too, as each chips in according to each’s ability. If you spend money you pay. If you don’t spend money, you don’t pay. What could possibly be more fair?

    La vie longue la taxe à l’achat!!

    • RinoWatch

      Jerry,
      Why should businesses become *Unpaid Tax Collectors?*
      Do you have any concept to the amount of time it takes to prepare the monthly reports and the audits that are involved on a regular basis?

      How about “re-sale” permits for those who own restaurants, etc. who shop for food & drink at Costco and resell to customers who are sales taxed? Are you aware of the cheating that would go on?

      NO Sales tax – Period!

      • Crawdude

        I agree whole heartedly ” no sales tax”, Oregonians would lose out one of their major tax write-offs. The only way around that, would be if we ELIMINATED (not lowered) the income tax and went to a sales tax. I don’t that happening and I don’t see a sales tax that replaces the property tax passing

        Isn’t it in the Oregon constitution that schools must be funded by the property tax?

  • Ted Kennedy’s Liver

    The counties had eight years to come up with a viable plan to replace timber revenues and cut costs and they didn’t lift a finger. Inaction has consquences, live with it.

    Here’s my plan.

    Republicans will continue to receive county services without raises in fees or taxes – unless they contributed money to any environmental group or were a Democrat within the last ten years.

    Democrats, whose office holders supported the environmental lobby and appointed the leftist judges who sided with them, will pay as they go.

    Tuition for Republican parents of public school students – $0. Tuition fo Democrat parents of public school students – $8000 per student.

    House on fire? Republicans get fire department service as before. Democrats must pay in cash or via credit card or the local FD lets their house burn.

    Really, this is a golden opportunity for Republican candidates for office in the affected counties to point out who is to blame for the high unemployment and low government revenues in these areas, but they won’t. They’ll fall over each other in a race to the bottom to see who can promise a bigger bailout than their Democratic opponents.

    • dean

      TKL…all kidding aside, most of the judges who ruled in favor of environmental restrictions on timber harvest were rEpublican apointees. Look it up.

      And under your “plan,” who would PAY for the services that the Republican residents would recieve? Non affiliated voters perhaps? The services don’t just magically appear.

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