Rural counties dealing with loss of fed dollars

Faced with federal subsidy cuts, counties are chopping services and clamoring for logging money


Josephine County, Oregon, faces an ominous budgetary challenge with the start of 2015: The southern Oregon county has already cut back around-the-clock law enforcement, and officials say they’re now “trying to figure out now how to keep the jail open.” The funding hole is from the loss of federal dollars through the Secure Rural Schools and Community Self‐Determination Act (SRS), which Congress failed to renew last year. As a result, for the first time since 2000, rural and mostly Western counties are missing out on more than $300 million in annual subsidies that pay for schools, road maintenance, government services and jobs, search and rescue, and conservation projects.

“We’ve seen reductions in sheriff’s patrols, and we’ve seen some counties reduce their public and mental health services,” says Eric Schmidt, communications manager for the Association of Oregon Counties. “It is a significant loss of vital public services to Oregonians, and we’re feeling it.”

Secure Rural Schools launched in 2000 as a stopgap program to make up for declining timber payments from national forests and Bureau of Land Management parcels after logging precipitously slowed in the 1980s. Along with Payment in Lieu of Taxes (PILT), the program compensates counties with large, tax-exempt public-land bases. Counties have been coping with declining SRS funds since Congress has only reauthorized SRS on a year-to-year basis since 2008, while both local government officials and policy analysts wonder from where and when relief may come from.

With the program’s non-renewal, the qualifying counties will only get $50 million from the Forest Service. Montana’s Lincoln County will lose more than $4 million, for instance. In Josephine County, the losses total nearly $5.4 million, or more than 8 percent of the county budget. Meanwhile, western Oregon residents have refused to raise local property taxes to defray costs.

An effort led by Oregon Sen. Ron Wyden, D, would have extended SRS with funds from the Strategic Petroleum Reserve last year. But representatives from Eastern states don’t understand why Western counties warrant the money. And western Republicans refused to get on board, too. The irony: The program’s expiration hurts loyal Republican constituents in rural communities.

Instead, politicians have tied the fate of SRS and PILT to a grander debate over Western land management and the pace of logging on forests and BLM lands. Rural counties want to see more timber harvesting to manage forests and bring in money. Even when it was paying out, Schmidt calls SRS a “Band-aid” that failed to address communities’ self-sufficiency, the management costs for public-lands–dominated counties, and looming forest-health and fire-risk concerns.

Logging on BLM lands in western Oregon (Photo: Oregon and Washington Bureau of Land Management)

Along those lines, now-retired Washington Rep. Doc Hastings, R, introduced the Federal Forest County Revenue, Schools, and Jobs Act in 2012. The bill would have set up a county revenue-sharing program, mandated the doubling of logging volumes on national forests and exempted such projects from environmental review. Not surprisingly, environmental groups opposed Hastings’ bill and instead pushed to connect rural county funding to conservation and restoration actions, not logging, in the forests.

Mark Haggerty, of Bozeman, Montana-based Headwaters Economics, says all interests need to rethink both PILT and SRS, perhaps combining the compensation funds. One measure would be to distribute money to rural counties in need, rather than by the existing formula, based on counties’ total public land acreage, which doesn’t account for the urban development that generates plenty of revenue.

Haggerty and others have also pitched the idea of a natural resources trust to remedy the situation. Under that scenario, managers would bank appropriations over the next 15 to 20 years to build an endowment for rural services and land management. A trust could support restoration projects, wilderness management and logging, when appropriate, while leveraging the resources of regional cooperative programs, such as Idaho’s Clearwater Basin Collaborative, which have received some past SRS funds. Over time, the trust would eliminate the need for annual appropriations – and end the political fights.

“If we can show that we’re working collaboratively on the ground with the county commissioners, the timber industry and the environmental community, to recognize both local needs and national interests,” Haggerty says, “then we ought to have a payment system that encourages and rewards that kind of management planning.” Oregon Gov. John Kitzhaber, D, has included the idea in a recent forest-management reform package.

The vision sounds promising, but waiting 15 years until the initiative is self-sustaining is a much longer stretch than a term in Congress. Many observers expect little more than another one-year SRS extension this year, leaving a lag in funding to the West’s rural counties, caught in the middle and left with uncomfortable choices.

“I think there’s a reasonable fear that because the federal government has chosen not to continue this money, and because local people, for whatever reason, are not able or willing to tax themselves to provide the services, there’s going to be a basic breakdown in the public-safety system,” says Bruce Weber, director of Oregon State University’s Rural Studies Program. “This could have long-term implications for (western Oregon), and it’s very difficult to see how it will get resolved.”

Joshua Zaffos is an HCN contributing editor. He tweets at @jzaffos.

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