Counties feel loss of timber money

March 05, 2007 11:00 pm

By Jeff Barnard

Associated Press writer

GRANTS PASS, Ore. – The shoulder patch worn by Josephine County sheriff's deputies pictures a log truck, a reminder of bygone days when timber cut from federal lands paid for their wages and all of county government, without property taxes.

Recession in the 1980s that cut housing starts and 1990s logging cutbacks to protect fish and wildlife pulled the curtain on those days forever, and Congress approved first one safety net and then another to ease the pain.

The pain is back.

Last December, Congress refused to re-enact legislation that paid $2.9 billion over six years to 700 counties in 39 states to make up for cutbacks in national forest logging. Prospects for renewal appear dim.

Nowhere feels the pain like Oregon timber country, which got about $250 million a year, more than half the outlays under the Secure Rural Schools and Community Self-Determination Act.

Sen. Ron Wyden, D-Ore., author of the act, told a town hall meeting Friday that renewing it is his top priority. But he noted that Sen. Larry Craig, R-Idaho, has said Oregon's share will have to be smaller, and he does not want to make the money permanent.

The last year of payments to Oregon included $33 million the state shares with schools around the state, $92 million for county roads in 31 of the 36 counties, and $108 million for general funds in 32 counties.

Gov. Ted Kulongoski supports renewing the federal payments, but says that beyond schools, the state can't make up the difference.

"Some of these counties are going to have to make some tough calls," he said.

Five counties in heavily forested western Oregon lost a third to two-thirds of their general fund budgets. They are considering a future with only the most dangerous criminals in jail, sheriff's patrol cars dispatched only for life-or-death emergencies, prosecutors ignoring burglaries and drug crimes to concentrate on murders and assaults, and paved roads turning to gravel, and snowbound roads going unplowed.

"That would take us back into a time of the not-too-distant past of what was called the Wild, Wild West," Josephine County Sheriff Gil Gilbertson told state legislators.

Only one county so far has achieved a solution. Refusing to cut law enforcement to a minimum, commissioners in Lane County – home to the University of Oregon – voted last week to impose a 1.1 percent income tax to cover most of the lost $36 million in timber money.

"Sitting around wringing your hands, having a pity party, that's not leadership to us," said Bobby Green Sr., a Lane commissioner and president of the Association of Oregon Counties.

In the 1980s, as logging collapsed in a recession, "we had a mass exodus from Lane County and laid off tons of people," he said. "It took years to get back to a level of stability. And we're not even close to it."

Three counties – Curry, Josephine and Jackson – are asking voters to approve property tax increases. Faced with strong anti-tax sentiments among voters, the rest are laying off employees and hoping Congress will restore the money.

Harney County, whose 7,600 people live on 10,000 square miles of high-desert rangeland and timbered mountains in Eastern Oregon, has considered a gas tax, an income tax and a supplemental vehicle registration fee, but either voters or officials have rejected them. With most private land taxed at a low agricultural rate, making up the difference would require tripling the property tax rate.

"The old covered wagons had ‘Oregon or Bust' painted on them," said Harney County Judge Steven Grasty, whose title is equivalent to a county commissioner. "We're busted."

Grasty would like to return to the days when logging gave Harney County the top per-capita income in the state and the biggest covered sawmill in the country, but recognizes that is unlikely when six years of Republicans controlling the White House and Congress couldn't achieve it.

"If this continues on, I think we will see one more step in the evolution or devolution of our economies in rural Oregon," he said.

Most counties don't have the home rule charter that allows Lane County commissioners to enact an income tax, and statewide measures in the 1990s make it hard to raise property taxes by more than 3 percent a year.

For nearly a century, the timber money was a good deal.

To gain support for national forests, President Theodore Roosevelt agreed in 1908 to share 25 percent of the revenues from selling timber with the counties where it was cut for schools and roads.

Eighteen counties in timber-rich Western Oregon got an even better deal. Since 1937 they shared half the revenue from logs cut on a patchwork of lands bought back by the federal government after the Oregon & California Railroad went broke.

The money far outstripped what federal lands would produce in taxes. Josephine County Assessor Mike Schneyder estimated taxing public lands at the same rate as private forests would bring in little more $100,000 a year locally. The county got $12 million last year from timber payments.

Before the safety net, the money from the O&C lands was so good that from 1970 to 1980 Josephine County didn't levy any taxes.

But the well sometimes went dry, too. In the early 1980s, the housing market went sour, log prices plummeted, and Josephine County saw revenues fall to less than $5 million a year.

Things really got bad in the 1990s, when conservationists won protections against logging to protect the northern spotted owl and salmon. Congress approved a safety net, and when that expired, Wyden wrote another.

Josephine County Sheriff Gilbertson warned legislators that without the timber money, he will be down to one patrol car on the road 20 hours a day. The 262-bed jail will have guards enough to house only 20 to 30 inmates.

In Curry County, Commissioner Marlyn Schafer can only hope voters approve the boost in property taxes on the May ballot.

"What we have left in the general operating fund is just simply departments mandated for us to be a county under state statute – assessment, taxation, treasury, and public safety," she said. "If you can't pay your bills and don't have enough employees to do the minimum mandates, how are you a county? We don't know what will happen. There is no precedent for this. The state has never faced this."