Rep. Richardson: County Funding Crisis

The loss of federal timber replacement revenues (commonly referred to as O & C funds), to 33 Oregon counties is both imminent and catastrophic. It is not being melodramatic to say more than one Oregon county faces shutting off their lights, closing their doors, and ceasing to exist by year’s end, unless O & C funding issues are resolved. Consider the following: 68% of Josephine County’s General Fund revenues depend on federal timber replacement money; for Douglas County 69% and for Curry County 63% of their G.F. revenues come from federal payments. The federal timber money replacement payments are scheduled to end by July 1st and the O & C counties are in jeopardy.

For a quick summary of the affects of losing O & C timber replacement revenues to Oregon counties, consider the following:
– Six Oregon counties will lose more than 1/3 of their GF budget.
– Fourteen counties will lose more than 1/3 of their road and highway funds.
– Oregon’s large landowner is the Federal Government””57% of Oregon is “Federal Land”!

To gain a deeper understanding of the O & C funding debacle, a little history might be useful. In the early 1900’s land grants “”such as the Oregon and California (O & C) railroad””previously conveyed to wagon-road and railroad development companies were reconveyed to federal ownership. The transfer of ownership of these large tracts of land to the federal government negatively impacted the counties in which the lands were located. Once the federal government assumed ownership, the counties thereafter permanently lost the economic and tax-revenue benefits that could have been generated by private ownership. In addition, the O & C counties incurred and continue to incur the costs for providing critical services for those federal lands””services such as fire suppression, law enforcement, waste removal, search and rescue operations and road building and maintenance. To offset a portion of such county economic losses and expenses, the federal government eventually agreed to share with the counties 25% of the revenues generated from those “National Forest System” lands.

For the last half of the 20th century, 33 Oregon counties depended on O & C timber revenues that resulted from the O & C Act. These federal payments became the mainstay for funding rural Oregon’s public schools, roads, and other vital public services.

During the 1980’s and 90’s timber revenues were sharply curtailed as a result of federal court rulings””originating with the Spotted Owl’s listing as an endangered species. Hundreds of Oregon lumber mills closed as rural communities lost access to the economic resources generated by harvesting, hauling and milling timber from the federal O & C and other timber lands.

To temporarily alleviate the financial devastation caused to O & C counties by the loss of O & C timber revenues, Congress passed the Secure Rural Schools and Community Self-Determination Act of 2000 (Public Law 106-393). This Act provided “safety-net” payments to O & C counties until its sunset on December 31, 2006. The Act has not been renewed and its payments will end on June 30, 2007. (Currently, there is a rider to a Congressional budget bill that would extend the safety net funding for one year, President Bush has announced his intention to veto the entire bill for reasons not related to the safety net funding rider.)

According to the Association of Oregon Counties (AOC), the O & C counties will lose approximately $460 million that is needed to fund essential county services over the 2007-09 biennium. The consequences of losing $460 million from rural Oregon county economies are far-reaching. Hundreds of public and private sector jobs will be cut, which will result in the loss of many more jobs in related service, supply and support industries. If this occurs, the affected counties will be thrown into severe economic recession and the resulting demand for state funded programs and services will spiral upward.

To put into perspective what the loss of these funds will mean to average citizens, I called a Josephine County Commissioner and asked what the loss of O & C replacement funds is likely to mean for Jo. County. The Commissioner said Josephine County is preparing for the initial loss of the federal funds. In recent years it has created a contingency fund of about $5 million. If the O & C replacement funds end in June of this year, cuts will begin and continue over the last half of the year.

Assuming the federal payments will not be extended, Josephine County voters will determine whether or not the cuts in county services will be required. The Commissioners have placed a levy on the May ballot that would quadruple the county’s portion of the real property tax from $.58 per thousand to nearly $2.50 per thousand dollars of assessed value. If the May levy fails, a second levy will be attempted in September. If both levy attempts fail, by the end of 2007 the Commissioner expects the following list of cuts may need to be implemented:

1. Seventy-five county employees may need to be laid off. If September’s second attempt for a levy increase fails, an additional 25 employees are likely to be cut.
2. Josephine County and City of Grants Pass share the county jail. Currently there are 150 beds for inmates at the county jail. After the cuts there is likely to be only 10-20 beds available for Josephine County and Grants Pass inmates. (The fishing term “Catch and Release” will take on a completely new meaning.)
3. The County Sheriff’s budget is expected to fund only one patrol car for the entire county, and it will be on duty only 20 hours per day.
4. The District Attorney’s office currently has 8 attorneys and 9 support staff. It prosecutes offenders for both Josephine County and Grants Pass City. After the cuts the county expects to budget only the D A and 2 assistant attorneys, plus 2-3 support staff members. At such reduced staffing levels, prosecutions would then be limited to violent crimes. Drug offenders could neither be arrested due to the lack of jail beds, nor prosecuted due to the lack of District Attorney capabilities. Such low staffing levels would also preclude prosecution of non-violent property crimes, like burglaries.
5. Road maintenance and repair could lose $2 million and cut up to 17 public works department employees.
6. Josephine County’s library system would be expected to close its doors, with only a single library opening a reading room for a few hours each week.
7. All non-mandated Public health services may be affected; they comprise 1/3 of county public health services.
8. The Juvenile Detention Center, which services both the county and city, would likely be closed, with the resulting loss of at least 14 beds. Juvenile offenders could then only be cited and released.
9. On a positive note, as a result of Measure 5, the county’s public schools would not lose their funding. School equalization rules require the state to backfill any local funding inadequacies.

In sum, O & C counties are becoming desperate. In Washington D.C. our five Congressional Representatives and two Senators are working feverishly to obtain at least one additional year of federal timber replacement funding for Oregon. If that occurs, the pressure will be off, but only temporarily. In 12 months the O & C counties will be back in the same position they find themselves today.

The root of the problem stems from the federal government’s control of 57% of Oregon land–of which 2,651,771 acres are O & C lands. How the Feds obtained such large tracts of Oregon’s land mass is not important. What is important is the recognition that rural Oregon’s prosperity has always depended on effective and productive management of our natural resources. Timber was to rural Oregon communities what corn is to Iowa. For more than a century O & C counties relied on timber-related jobs for their economy, supplemented for decades by federal timber payments. Now both are gone.

It appears the federal government is not able to effectively, efficiently and economically manage Oregon’s forests in a sustainable manner. If the federal government is incapable of managing Oregon’s forests and unable to generate a reasonable amount of O & C funding revenues, maybe it is time for the federal government to relinquish control over Oregon’s forest lands. The State of Oregon is ready, willing and able to assume from the federal government full responsibility for Oregon timber lands and forests.

The devastating forest fires that needlessly consumed thousands of acres and billions of dollars of prime timber just a few years ago, taught Oregon an important lesson. Proper forest management does not mean ignoring our forests. Oregon foresters understand the principles of sustainable forest management.

Now is the time””before our O & C counties become insolvent””for Oregonians to wake up, stand up and demand state control of Oregon forests. The federal government is immersed in foreign quagmires and cares nothing about Oregon’s rural county economies. Oregon natural resources should be under Oregon control and management. How long will we endure having our fellow Oregonians in rural counties grovel at the feet of impotent federal bureaucrats, begging for a continuing federal hand-out, while Oregon forests become tender-boxes awaiting the next summer conflagration. I, for one, want our forests back now.


Dennis Richardson
State Representative

Post to Twitter Post to Facebook Post to LinkedIn Post to Reddit

Posted by at 06:33 | Posted in Measure 37 | 11 Comments |Email This Post Email This Post |Print This Post Print This Post
  • John Fairplay

    Hey, I have an idea. How about if we just raid some more kicker money to help out these counties? How about if Rep. Richardson leads the way on this great, great idea?

  • Jerry

    Don’t demand and stand up – just take them back.

  • Steven Plunk

    Excactly what would be the mechanism for getting control of these lands and who would likely oppose such a move? Before getting into this fight I would like to know my chances.

    While we are waging such a fight has anyone looked at applying RICO statutes to the cabal of environmental groups who are constantly plotting to tie up timber resources? Part of those plans include illegal acts (called civil disobediance) which should be their achilles heel.

    The destruction of our modern way of life is truly the goal they are after.

  • eagle eye

    Richardson and his ilk should stop hallucinating about the federal government turning these lands over to the timber industry. It’s not going to happen, especially not with the Democrats back in control of Congress. (As if it got anywhere with the Republicans in control). There’s no way the country is going to sell off the national forests. Forget it.

    Get over it, folks. The rest of the country is tired of giving handouts to a few western counties. Most people probably think we’re lucky to have these natural areas. We have, what, 100,000 square miles in Oregon for less than 4 million people. Halve that, for the government share of the land, and you’re left with 50,000. If Oregon can’t make a go on that, most people aren’t going to have much sympathy. What’s wrong with you people, they might ask.

    • Steven Plunk


      What’s wrong is the fedral government not paying property tax on the land it owns. That’s why the original plan was to share in the timber receipts. Most of the states (especially east of the mississippi) don’t feel such a pinch as the feds own little of the land. The long term deal has been breached by the feds so I think they do owe us something. It’s not unreasonable to believe that.

      Your take on the political realities are probably right. Perhaps the courts could provide some relief. The environmental groups certainly exploited that angle to their benefit.

      • eagle eye

        A case can be made for the federals paying taxes on the national forests. But on the other hand, why should that federal land be any different than any other? Do they pay property taxes on national parks, or military bases, or the federal courthouse?

        Is there any cost to the county incurred by that land simply sitting there?

        Most people in the rest of the country would probably say having these natural areas is something to kill for, why should they also pay our property taxes if the land is not costing the county money?

        My belief is there is plenty of private land for the county I live in to make a go of it. (I live in one of the affected counties). I don’t especially savor the prospect of higher taxes or diminished services. But I look at the county taxes here, they are low, compared to the rest of Oregon.

        I would say, build up a decent economy here and we’ll do OK. Maybe having the private land all zoned for forestry doesn’t make sense any longer. Even half the land in my county leaves an area a third the size of Massachusetts for 1/20 the population. Why isn’t that enough to fund the skimply services the county gives?

        Anyhow, as I say, and as you seem to realize, there probably isn’t going to be much choice.

        Like it or not, guys like Richardson just seem to be living in a time warp. It’s almost 20 years since the spotted owl ruling! It’s time to get on with things.

  • David G

    Note that 33 counties in Oregon receive timber payments. Whenever you read the hysterical “sky-is-falling” reports about the cutoff of these funds, the reports always focus on Josephine and possibly Coos counties. And that’s all.

    In my own county, Benton, the payments amount to about 4% of annual spending – which is a large amount but hardly unmanageable. I would like to see a chart showing the amount each county in Oregon would lose and compare that to total annual spending – not just “general funds” spending as Richardson does. I suspect that loss of funding for most counties is actually in a very manageable range.

    We all know that all counties provide unnecessary services. And the cost of employee benefits has gone well above private sector costs. If counties got serious about looking at just these two areas of spending, then nearly every single county would find that it has no problem handling this “crisis.”

    • eagle eye

      David, I live in Lane County, which is going to lose about a third of its general fund revenue. It is not just the counties you mentioned (which are going to be hit harder than Lane).

      While I’m not particularly sympathetic to the way the counties have gotten themselves into this mess — see my posts above — it’s simply unrealistic to think that the problem can be solved without a good deal of pain. And it’s not going to get solved simply by cutting back on benefits. For one thing, the biggest benefit issue is probably PERS, over which the counties have virtually no control. In fact, it’s not clear how much control the state has over PERS at this point.

      It’s a hell of a mess, sorting it out is going to be messy too.

      If they open up the county jail in Lane County due to the looming budget cuts, I hope they all hitch a ride to Benton County!

  • Jerry

    Right on Right on! Cut the expenses and save the trees. Fools all.

  • John Fairplay

    I for one am also tired of subsidizing the national parks and other federal lands that taxpayers must support. The best short-term solution would be to open up a new federal homesteading opportunity. Much land that was not usable for economic purposes in the 19th century will be today due to advances in technology. Whatever is not claimed by individuals within a decade should either revert to state ownership.

  • Tim Lyman

    Much as I loathe the tactics of the environmental lobby and the addle-brained court decisions that took away federal timber revenues, I have to agree with the poster who pointed out that the affected counties have had twenty years to adjust. These folks aren’t in a crisis because some temporary pork is going away, they’re in trouble because they failed, for twenty years, to plan their finances around the certainly that the TEMPORARY pork would eventually be going away.

Stay Tuned...

Stay up to date with the latest political news and commentary from Oregon Catalyst through daily email updates:

Prefer another subscription option? Subscribe to our RSS Feed, become a fan on Facebook, or follow us on Twitter.

Twitter Facebook

No Thanks (close this box)