Bills would help timber counties that go broke

GRANTS PASS, Ore. (AP) — The Legislature is working on bills designed to help rural timber counties that go broke if taxpayers refuse to fill the gap left by declining federal logging revenues.

The bills would make it possible for counties like Curry and Josephine to declare bankruptcy, merge with other counties, tap revenues from other counties and taxing districts, and for the state to step in to run essential services.

"The situation facing our rural counties is dire, and it's important for the legislature to have a conversation about all possible options to help these communities address their fiscal problems," Rep. Bruce Hanna, R-Roseburg, said in a statement. "A number of ideas have been floated. Some may be good and some may need some work, but the important thing is that we have the discussion."

Rural counties in timber country were able to keep their taxes among the lowest in the state for decades because of generous revenues from logging on federal lands. But logging cutbacks forced by protections for fish, wildlife and clean water cut into those revenues, and a fiscal safety net has expired, with little hope of being renewed.

Meanwhile, statewide property tax limitations have made it harder to increase tax rates. Even if a proposal to increase logging on the so-called O&C lands in Western Oregon is approved, it would be years before the counties see any money from it.

Curry County is likely to be the first to go broke if voters turn down a measure on the May 21 ballot to triple the property tax rate, which is second lowest in the state. Sheriff John Bishop has said the sheriff's office will effectively have to shut down without extra revenues. County commissioners are not counting on Congress to ride to the rescue with a renewal of the fiscal safety net that has kept them afloat.

Neighboring Josephine County and Lane County are also asking for tax increases to restore deep cuts to the law enforcement system.

Legislators have been working with the governor's office on a proposal, not yet filed as a bill, which would allow the governor to declare a public safety fiscal emergency if a county goes broke, and create a body to run the county. That body would have the power to impose an income tax assessment within the county to pay for operations and obligations.

One bill (HB 2206) would allow revenues from other counties and taxing districts to be skimmed to pay for services in counties declared by the governor to be in a fiscal emergency. It would also allow the secretary of state to take over elections from the county clerk.

Another (HB 3404) would let counties that got federal timber county safety net payments amounting to 10 percent of property tax revenues to draw on a special fund the next two years. A joint resolution (HJR 2) proposes amending the state constitution to let the Legislature refer to voters a measure to merge two or more counties into one. Another (SJR 10) would let counties propose a levy that goes beyond the statewide property tax limitation known as Measure 5.

"Curry County is off the fiscal cliff," County Commission Chairman David Brock Smith said. "With bills like this the state is scrambling to see if we land in the ocean, whether they have a life raft out there for us."

Copyright 2013 The Associated Press.