Tuesday, November 22, 2011

Will federal austerity measures bankrupt timber counties?

Congress' so-called super committee failed this week to reach a deal on deficit reduction. This means $1.2 trillion in automatic spending cuts are scheduled to go into effect in 2013. Program-specific cuts haven't been identified, but an almost certain casualty will be federal subsidies provided through the Secure Rural Schools and Community Self Determination Act.

Congress created the subsidy program in 2000 to help counties whose cash flows were hurt by policies limiting timber harvests on federal forests. The program was extended in 2008, as part of the bank bailout legislation, at a cost of $3.3 billion over the past four years. While the savings from this program will have a minimal impact on the national deficit, it will have huge ramifications for Oregon counties, which received the lion's share of this subsidy.

A recent study by researchers at Oregon State University suggest nine Oregon counties will lose more than a quarter of their general fund revenues, while another 11 will lose at least half of their road funds. This roughly translates to layoffs in the order of 3,800 to 4,400 for all of Oregon's rural counties.

One of the counties likely to take a drubbing is Curry County, with a population of 22,364. At a Oregon legislative committee meeting last week, Commissioner Dave Itzen said Curry County faces a $3 million budget gap, even after making severe cuts to programs like public safety.
We have one deputy on patrol in any given time in the entire county, and there's four hours [a day] where no one is on patrol. The jail was so cash-strapped that the county recently had to issue long underwear to prisoners when its 25-year-old heating system failed.
These counties aren't faultless. When Congress reauthorized the timber subsidies in 2008, it did so with a plan to scale down the subsidies. But the counties have few other options for raising funds. Unemployment in many of these counties still remains above 10 percent, so county commissioners are reluctant to raise taxes. New industries have been stymied by environmental regulations and the tourism economy has languished.

Oregon's representatives are talking about revisiting national forest policy, with an eye toward "sustainable management" as Rep. Peter DeFazio explained in a press release. But with new housing start numbers stagnant, it's questionable whether opening federal forests to greater harvest would bring in revenues at a level that could replace the discontinued subsidies.

At this point, counties are probably best served by finding ways to consolidate services with each other and/or the state. While the federal government may own much of the land in these counties, it doesn't seem too concerned about the people on it.


ScottA. said...

It does pain me to see an area I know well fall on such hard times. With the South Coast of Oregon and the North Coast of California so closely related in demographics, this is a problem I see impacting my home area as well.

Even if the economy improves soon, I just don't see the timber industry on the West Coast rebounding. The housing bubble that helped lead us to this great recession showed that the demand for lumber is limited.

I'm seeing more and more lumber coming from the southern United States off of tree farms, filling the need for cheap lumber without the environmental "guilt" of lumber harvested from forests.

I just don't know what Curry, Coos, or the other timber counties are going to do to fill the gap. Tourism is too finicky, and I don't see much industry moving into the area. I hate to say it, but maybe people will just have to move to new locations as it seems there isn't much chance for new growth and federal subsidies can't last forever.

KevinN said...

I wonder just how far cities and counties can go in cutting basic services. I was appalled to read that one county only has a single deputy on duty at best, and that there are four hours a day when nobody is on patrol. Don't local governments have some minimum duty to provide basic services to their citizens? I would hate to see what the patrol schedule will look like when they get done with the next round of cuts. If I lived in a rural place that was faced with a similar situation, I think I might take Scott's advice and move someplace else. The risks just don't seem worth it.