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Oregon counties nearing budget crisis

The loss of federal funding has timber economies struggling.

January 28, 2007|Lynn Marshall | Times Staff Writer

EUGENE, ORE. — Lane County has a $47-million hole in its budget.

With $20 million gone from the general fund, $20 million from the road fund and $7 million from the schools budget, county Budget Manager David Garnick is trying to figure out how to provide the services people expect.

"The things that give you quality of life -- health, safety, elections, prosecution of crime -- you name it and we have to cut it," he says.

The county is projecting 260 to 285 layoffs. "We're not sure yet who's going to go out the door," Garnick says.

Runaway spending? No.

This west-central Oregon county, population 335,180, is one of 34 counties in the state that had received payments under the Secure Rural Schools and Community Self-Determination Act. Congress passed the act in 2000 as a safety net for timber-dependent counties, whose revenues were in steady decline because of changes in federal forest policies and the rise of environmentalism. When Congress failed to renew the act last year, the stage was set for layoffs in Oregon -- and for budget cuts in rural counties nationwide.

The last payments from the program went out at the end of December.

Forty states had been receiving money that, in most cases, was directed to schools and road-building. The program doled out more than $2.9 billion. Oregon got the largest share, $250 million a year; California was receiving $60 million, Washington about $40 million.

In California, as many as 100 school districts in 39 counties may face budget cuts. Bob Douglas, superintendent of the Tehama County schools in Northern California and president of the National Forest Counties and Schools Coalition -- which has members in 37 states -- says the funding loss will affect 18,000 schools and more than 9 million students.

"The prospect of dismantling all these rural schools -- it is a true emergency, and Congress should treat it as one," Douglas said. "They like to talk about 'no child left behind.' These kids are going to be left behind."

Gene Evans, communications director for the Oregon Department of Education, says state schools will lose about $33 million this year. "Oregon isn't a big state, and that money has an impact. Every dollar makes a difference," Evans said.

In addition to the funds for schools and roads, the act provided money that flowed directly to the general budgets of 18 Oregon counties, used for essential government functions such as police, search and rescue, mental health programs and running elections.

Jackson County, which sits just north of the California state line and is surrounded by the Cascade and Siskiyou mountains, plans to shut down its 15 libraries in early April and lay off about 80 people. Coos County, a popular recreation destination on the southern coast, announced that it would lay off 100 workers, about 25% of the county employees, this spring.

"A lot of these counties were just barely hanging on anyway," says Gil Riddell, a policy manager for the Assn. of Oregon Counties.

The cuts come against the backdrop of efforts in Oregon over the past two decades to move from an economy based on timber, fishing and agriculture to one centered on manufacturing, marketing and the high-tech industry.

Most of this growth has been in the Portland area; rural Oregon economies haven't seen much of it.

And because of the general state of the Oregon economy, Riddell says, many counties that got money under the Secure Rural Schools and Community Self-Determination Act actually are worse off than they were before the law passed.

"The state of Oregon in 2001-2003 experienced the largest loss in general budget funds since the Great Depression. We had the highest unemployment numbers in the country," he says.

Reps. Peter A. DeFazio (D-Ore.) and Greg Walden (R-Ore.) have introduced a bill that would extend payments under the act for seven years. There also is a move to attach a one- to three-year extension to spending bills expected to come before Congress next month.

DeFazio says the rural funding program is absolutely crucial: "Hundreds of counties and schools across America rely on these funds, and the federal government has a moral, almost a contractual, obligation to them." Seventy members of the House have signed on as cosponsors of the stand-alone bill.

Lane County Commissioner Bill Dwyer thinks an extension of the program is a longshot.

Officials there can wait till May, he said, and then the layoffs and cuts will begin.

"If our chances were slim to none in the last Congress," Dwyer says, "now they are slim to almost none."

But not because federal lawmakers don't see a need to help the rural areas, Douglas County Commissioner Doug Robertson says.

"There really isn't any organized opposition," he says. "When the safety net passed, those were the budget-surplus years.

"Now we have deficits -- huge amounts of spending for the war, for Katrina, lots of other priorities. New funds have to be found for the program, and that isn't easy."

Robertson says that getting some kind of funding extension passed is everyone's priority right now.

Unlike most officials in Oregon, he's at least somewhat optimistic.

"People wonder what I'm smoking," he says, "that I can continue to voice some optimism.

"I have to believe that no one is willing to say: 'We can't create the funds; get over it' -- because here in Oregon, we can't get over it."

lynn.marshall@latimes.com

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