LOSS OF FEDERAL MONEY COULD COST 100 COUNTY JOBS

The Register-Guard - Eugene, Oregon
Original Publication Date: January 17, 2008

By Matt Cooper

The Lane County commissioners could cut 100 jobs in the coming few years — or as quickly as July 1 — given the comments from federal lawmakers who said this week that they have given up hope of winning full renewal of critical federal aid to counties.

The county board is planning for the fiscal year that starts July 1 and has drawn up three possible budgets: Two plan for a reduction in the traditional $40 million in annual federal timber aid over the coming years, and one does without the federal cash entirely.

Under all three scenarios, the result is the same: Between 99 and 110 jobs — about 7 percent of the county work force — would be cut by 2013. Under the worst-case scenario — no renewal of federal money in the next few months — the board would cut 97 jobs by July 1.

The commissioners have two choices, board chairman Faye Stewart said: cut now or cut later.

“Other than that,” he added, “we’re at the mercy of the federal government.”

Oregon’s federal lawmakers have been unable to persuade Congress and the president to renew a multiyear funding package called The Secure Rural Schools Community and Self-Determination Act of 2000.

Until its expiration two years ago, the act gave federal aid to counties such as Lane with federal forests on which timber sales have plummeted due to environmental restrictions.

U.S. Rep. Peter DeFazio said this week that a multiyear package with lower payments for counties including Lane is most realistic given that senators in other states want to rework the funding in order to increase payments to their states.

“While they’re complaining about the funding received by Oregon and other timber-dependent counties, at the same time they want to create new entitlements that flow disproportionately to states that receive a huge amount of oil and gas revenues and other windfalls,” DeFazio said. “It’s kind of hypocritical, but that’s where we’re stuck with the Senate and we’ve got to deal with it.”

Josh Kardon, chief of staff for U.S. Sen. Ron Wyden, said Wednesday that a reduction of the timber payments over the coming years is “the best that can be achieved,” given the opposition of senators to the timber-aid legislation that long favored a handful of states, including Oregon.

Kardon blamed the failure to win renewal of the payments late last year on senators who killed the larger energy bill that included the funding, because those senators wanted to protect multimillion-dollar subsidies to oil companies.

The $40 million in federal timber payments has annually funded one-third of Lane County’s general fund and half of the county road fund.

The county received a one-year extension of the payments last year, and that has funded the government through June 30. DeFazio said he would pursue another one-year extension at the current amount, which county board chairman Stewart said could free the county from making any cuts in the coming fiscal year.

Proposed county department budgets for 2008-2009 will be submitted this month, and budget manager David Garnick said he expects them to cost a total of 4 to 6 percent more than in the current year. With revenue projected to grow just 2 to 3 percent, the commissioners must find new money, make cuts or both, he added.

The board will decide next month how to rank all 80 services in the general fund, a key step toward determining which to cut if the federal money has not been renewed by the county’s July 1 deadline to submit a balanced budget to the state.

Life-or-death services and those that generate revenue or meet state and federal mandates are likely to be priorities, Stewart said.

If Congress renews the federal payments at lower levels for four more years, the board plans to cut 105 to 110 jobs by 2013, under scenarios that call for cuts in 2008-2009 or in subsequent years. If Congress does not renew the money, the board could cut about 100 jobs by July 1 of this year, Stewart said.

The fiscal dilemma results in part because the cost to run county government — driven by employee salaries and benefits — is rising faster than revenue, mainly property taxes.

The board has long failed to persuade the public to pay more for services. Last year, 71 percent of voters said no to a county income-tax proposal.

The board can curb costs down by cutting compensation, cutting jobs or both.

It is unclear how long the county can continue to cut jobs to balance the budget, given the increasing burden on the remaining work force and the drop in service to the public.

But county officials have strongly defended compensation levels, saying workers and managers have made concessions over the years and the county must pay competitively to retain qualified employees.