Even if there had been no recession, a handful of Oregon counties, mostly in the southwest corner of the state, likely would be in a world of financial hurt. They’ve been hit by a perfect storm of financial difficulties not of their own making, and now the state is preparing to step in, should they go broke. The state can do little else.
The problems for Curry, Coos, Jackson, Josephine, Lane and other counties are twofold. They’re among the 18 counties in the state in which former Oregon & California Railroad lands are located. After the railroad went broke and Uncle Sam reclaimed the land, Congress in 1937 ordered it to be managed for sustainable timber production and allotted a chunk of the money raised from timber sales to the counties.
It’s an understatement to say that revenue from timber sales in the O&C counties has declined over the years.
The counties divvied up, on average, $150 million in O&C payments annually between 1960 and 1963; in 2011, they split $40 million. All federal payments to the counties have dropped by more than half during the same period.
The second problem lies in Oregon’s property tax system. When Measure 50, the third of three limiting measures, was approved in the late 1990s, it locked in place permanent property tax rates. The O&C counties had historically low rates that became permanent, 59 cents per $1,000 of taxable value in Jospehine County and a penny more in Curry. By contrast, Deschutes County’s permanent rate is $1.27 per $1,000.
Without a change in the state constitution, those rates cannot change, though several counties will ask voters to approve public safety local option levies later this year.
Even if all are approved, the state may have to step in if the counties are to provide even the most basic services. Among bills being considered by the Legislature, one would allow the state to declare a “fiscal emergency” and take over public safety. One would allow the counties to declare bankruptcy. Others would let the secretary of state provide election services and the department of revenue assess and collect taxes. Those services all are mandated by law.
There is no quick or simple answer to the counties’ financial difficulties, though efforts to find some solution continue. Meanwhile, the state may have to step in.