Is it possible that one of Oregon's 36 counties could disappear? And if so, would anyone step in to provide basic services to its residents?
The answer to the first question, according to many in and out of government, is yes, and soon. At least two Oregon counties, Curry and Josephine, warn they may stop providing state-mandated programs as soon as a year from now.
But no one is sure who would step in to take over services such as elections and law enforcement, which has county leaders concerned and the state scrambling to put together a system for saving counties in crisis.
"It's new territory," said Paul Snider, legal counsel for the Association of Oregon Counties.
How did Oregon arrive at a point where the dissolution of one or more of its counties is being contemplated and planned?
The problem is tied to the state's wealth of federal forests. For more than a century the federal government shared timber receipts with local governments, which rely in large part on property taxes to pay for services. Federal land is exempt from local property taxes.
Following the decline of public lands logging in the 1990s, Congress passed the Secure Rural Schools and Community Self-Determination Act, which expired in 2007 but was renewed for one year. The 33 Oregon counties covered -- three are not -- under the law received their last payments seven months ago.
Starting next month, Oregon's counties will be out a combined $206 million a year in federal money. School districts will lose $31 million. Statewide, that means a cut of 12 percent to county discretionary general funds, which pay for programs such as sheriff's patrols and libraries, and a 28 percent cut to road programs.
But some counties will fare far worse than others. Coos, Curry, Douglas and Josephine counties will each lose at least half of their general funds, while others such as Union or Washington, will lose only about 1 percent.
Many counties have already eliminated jobs or shut libraries in anticipation of the loss, although Oregon's congressional delegation is still fighting for a renewal.
"We've cut everybody down to the very minimum and we know we can't cut anymore," said Curry County Commissioner Marlyn Schafer.
The 1,648-square-mile county on the southern tip of Oregon's coast is nearly as old as Oregon itself. With the loss of the county payments program, Curry will lose about two-thirds of its $6.1 million general fund.
State statutes mandate that counties provide services such as jails and property assessments. Eric Schmidt, spokesman for the counties association, said the group is combing the state's law books to figure out just how many services the state requires. Generally, he said, they fall under the umbrellas of public health (restaurant inspections, for instance) public safety (jails) or clerical duties (tax assessment).
Where state law isn't clear is what happens when a county can't afford to perform these functions. It's never happened.
"That's part of the problem," said Schmidt. "There's no precedent."
Report suggests solutions
Last month a state task force issued a 122-page report with recommendations for handling the problem, from allowing counties to spread their lodging taxes to nontourism programs to increasing the state's support for local services such as medical examiners and county prosecutors.
The last of the report's 54 suggestions outlines procedures to handle the possible collapse of one of its counties. The proposal envisions four stages of assistance: monitoring and technical assistance; drafting a recovery plan by a state board; state takeover; and county dissolution.
If the austerity in the first two steps fails to keep a county afloat, the state would assume the power to sell county property, fire employees, allocate local funds and assume various other responsibilities and powers. And if that isn't enough to keep the county from failing, the state would then help the county dissolve, possibly merging with an adjoining county.
"This is Plan Z," said Jillian Schoene, a spokeswoman for the governor's office. "Other states have a plan to respond to counties should they do this, and the task force felt that the state should be prepared should the counties hand the keys to them."
But counties neighboring Curry or Josephine have problems of their own, so a merger would create certain hardships. Jackson County Commissioner C.W. Smith has said that every new resident puts his county further in the red.
It also brings up a question: Would residents of the failed county then start paying property taxes at their new county's higher rate?
Counties have two options for finding fiscal balance: cut their budgets or try to increase revenue. They've been cutting for some time now. Raising more money has proved more difficult.
Raising taxes not easy
Some of the counties most hurt by the loss of funds are those whose tax rates stayed low in part because of the large amount of federal timber money they received. For example, Josephine and Curry counties' property tax rates, about 60 cents per $1,000 assessed property value, are far lower than the state average of $2.80 per $1,000.
But raising those taxes isn't as simple as a vote by county commissioners. Measures 5 and 50, passed by Oregon voters in the 1990s, limit a county's ability to raise property taxes, and they must be approved under the "double majority" rule, at least 50 percent voter turnout plus a majority of votes to be adopted, unless it's a general election in an even-numbered year.
And voters have repeatedly turned down ballot measures asking them to raise taxes to pay for crucial services. According to the governor's task force, voters rejected about half of the 136 local levies placed on ballots in Oregon counties between 1997 and 2007.
The option exists of forming special tax districts to fund specific programs such as libraries or sheriffs, such as the one approved by Deschutes County voters in 2007. That's a move Curry County is considering.
But possible new local taxes and state support would cover only 10 percent to 40 percent of the shortfall over time, according to the task force. An increased share of federal timber receipts could cover another 2 percent to 15 percent. Enacting all of these politically challenging suggestions would still only make up less than half of the total shortfall.
That's why the task force listed urging Congress to renew the county payment program yet again as its first recommendation.
"But as time goes by that possibility becomes more remote, and the problems associated with late timing become more real and more serious," said Snider.The Oregonian
