Legislature weighs measures to cope with timber counties

SALEM — The Oregon Legislature is taking a hard look at intervening in the state's timber counties that are running out of money.

Lawmakers are considering a variety of measures that would allow the state to take over critical government functions and impose a temporary income tax on county residents. The issue became especially acute this week when voters in Curry and Josephine counties rejected property tax levies that the local sheriffs said were needed to pay for basic public safety.

Legislators who back intervention say the state has a strong interest in ensuring at least a basic level of government is in place so people are safe and can exercise their right to vote.

"We've got to protect people's constitutional rights," said Rep. Peter Buckley, an Ashland Democrat and the chief budget writer in the House.

Buckley said the state doesn't have money to bail out the counties. But a bipartisan panel of lawmakers representing some of the most drastically affected areas has been working on a handful of bills to help the counties avoid — or at least delay — becoming insolvent.

Some would loosen restrictions on how counties can spend funds earmarked for certain purposes. Others would go farther.

One would allow the governor to declare — with the agreement of legislative leaders from both parties — a public safety emergency, potentially triggering the merger of local governments. With the consent of a majority of county commissioners, the governor also would be able to levy a temporary income tax increase to pay for public safety. The money would be matched by state funds.

Another bill would allow the state to take over county government functions including tax collection, elections administration and building inspection and charge a fee to cover the costs.

Josephine County has the lowest tax rate in Oregon, followed closely by Curry County. Curry County is widely considered the closest to going broke and becoming subject to a state takeover. Josephine County is not far behind.

Some lawmakers from urban areas have been reluctant to use state dollars to help counties where voters have repeatedly refused to raise the state's lowest tax rates. But lawmakers from timber country say their counties face unique challenges. Since most of the land is owned by the federal government, it isn't taxable, they say, and the residents who do own taxable property are maxed out.

"People are desperate. And I don't think, when you live in another part of the state, you can possibly understand how difficult that is," said Rep. Val Hoyle, a Eugene Democrat and co-chairman of the House committee studying the troubles in timber country. "There are political and philosophical differences, but I think it's much more complex than just, 'Why don't they just raise their own taxes?' "

In Curry County, Commissioner David Itzen is not yet resigned to the idea the county will go broke after voters turned down a tax increase to pay for law enforcement. With a margin of just 446 votes, he feels a campaign could win approval if the measure went back up on the September ballot, especially if the Legislature allows the governor to take over broke counties and raise income taxes to pay for services.

"In the last few days I've talked to folks who have just begun to understand the implications" of a state takeover, Itzen said.

Itzen added that any revenue fix that might come from efforts by the Oregon delegation in Congress to boost logging on the so-called O&C lands is unlikely to raise any money for three to five years. That makes a local tax increase the only way to avoid a state takeover, he said.

Commissioner Cheryl Walker in Josephine County said officials there have been downsizing and contracting out services for 10 years, and have only a third of the employees they had when that process started. She said she was encouraged that the defeat of the public safety levy Tuesday was by a much narrower margin than last year.

Walker said she would welcome a bill that would allow a state takeover for up to three years if voters refused to fund minimal services, such as the sheriff's office.

"It might give us the time necessary, without being concerned about safety, that we could come up with permanent solutions," she said.

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