Timber payments extended

By By Don Iler Observer Intern June 29, 2012 12:09 pm

If president signs bill, Union County will receive about $645,000 from Securing Rural Schools act, $900,000 from Payments-in-Lieu of Taxes

Early Thursday morning, Congress announced payments from the Secure Rural Schools act and Payment-in-Lieu of Taxes would continue for another year after being added in a conference committee for the Surface Transportation Bill. 

The payments have been made since 2000 to counties to make up for the loss of timber receipts from diminished harvests on National Forest lands. Many rural Oregon counties, including Union and Wallowa, have been dependent on the payments in order to fund roads, schools and other projects. 

The payments have continued to be renewed year after year as counties have been unable to find other revenue sources to make up for the loss of timber payments, and the federal government has been unable to come up with a permanent solution to smaller payments from smaller timber harvests. 

The bill calls for about $346 million to be paid to rural counties throughout the nation, with about $100 million going to Oregon counties. Union County will receive around $645,000 from the Securing Rural Schools act and $900,000 from Payments-in-Lieu of Taxes. 

“If it hadn’t been extended, we would have been making cuts,” said Steve McClure, Union County commissioner. “We will be able to maintain services.”

McClure said that the funds are a very important source of funding for the county; being discretionary they can be spent where the county needs to.

Mike Hayward, Wallowa County Board of Commissioners chairman, said he was told that there would be a slight reduction from 2011 appropriations and at best guess expects between $700,000 and $900,000 if the bill is approved.

That roughly estimated sum will go to the county roads department; the school funding portion goes to the state before being distributed, Hayward said.

Hayward said the county budgeted $990,851; without the federal money it
would have about $65,000 to run its road department.

Oregon senators and representatives lobbied hard to get the money included in the bill. 

“This is the fourth time since I wrote the original county payments law in 2000 that Congress has come down on the side of schools, roads and law enforcement in rural, natural resource dependent counties,” said Sen. Ron Wyden. “$100 million to help stem the tide of layoffs, cutbacks and reductions in vital services in hard-hit rural communities could simply not have come at a better time.”

Counties in Southwest Oregon stand to gain the most from the payments. Curry County leaders feared the county would go bankrupt without the payments. Josephine and Lane counties had to release prisoners from their jails to make up for the projected shortfall. 

“This one year extension gives us the breathing room we need to continue our bipartisan and delegation-wide work toward a long-term solution that brings jobs back into the forests to create revenues that keep essential local services like schools and law enforcement afloat,” said Rep. Greg Walden, R-Ore.

Several solutions to solving the continued problem of making up timber payments to counties have been floated over the last year. One proposal by Rep. Peter Defazio, D-Ore., would have divided timber lands into two trusts, one for conservation and the other open to logging. A proposal by Washington Rep. Doc Hastings would have required federal lands to generate at least 60 percent of the previous income they once produced. However, neither bill has made it through Congress and a long-term solution to replacing timber payments has not been reached. 

“We think there needs to be more activity in our National Forest land,” McClure said. “They need to take more logs to the mills. The forests are overstocked and there is the potential for what is happening in Colorado (with the forest fires) to happen here. We need to go back to producing products in our National Forests.”

Historically, counties with National Forest lands received 25 percent of the revenue from timber sales. 

These payments began in the early 20th century when many counties in the Western United States complained they had smaller amounts of revenue to work with because much of the land was federally owned and therefore unable to be taxed by county governments. This system worked well until the 1990s when diminished timber sales on federal lands caused these payments to dry up, leaving many Oregon counties in a lurch.

The federal government owns 53 percent of land in Oregon, much of that under the Bureau of Land Management or the United State Forest Service. 

Oregon ranks fourth in the amount of land owned by the federal government. Only Nevada, Alaska and Utah have more of their territory owned by the federal government.