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