Lane County leaders appear set to save the county’s share of the recently renewed federal timber payments for now, carrying the funds over until the next fiscal year, which begins in July.
That could allow them to shrink what is anticipated to be a budget gap of several million dollars between revenue and expenses in the county’s general fund next fiscal year.
It also would mirror what the Lane County Board of Commissioners did with the last installment of timber payments. Those payments were approved by Congress in the summer of 2012, but are being spent this budget year, which began in July.
Both the 2012 and 2013 federal payments provide about $100 million to 33 Oregon counties — down from $280 million at the 2007 height of the Secure Rural Schools program. The payments were designed to compensate rural counties, parishes and boroughs across the nation for revenue they lost after environmental concerns caused a sharp decline in logging on federal lands.
The total amount earmarked for Lane County from the 2013 payments is $16.4 million, but some of that money flows directly to local schools and local forest managers.
The county’s general fund is expected to get $3.5 million, and the road fund will grow by $6.3 million. Those are the two pots of money where county leaders have leeway to decide spending priorities.
Commissioners Jay Bozievich, Sid Leiken and Faye Stewart all said they are leaning toward hanging on to all the timber payment funds until the 2014-15 fiscal year.
Stewart said that, given both the county’s projected general fund shortfall next year — most recently estimated at $5 million or $6 million — and uncertainty about whether mandatory federal spending cuts, known as sequestration, eventually will reduce the 2013 timber payments, that approach makes the most sense.
“All the county departments could use some additional money right now, but we have to get more information” about what the 2014-15 budget looks like, he said.
Bozievich said in an e-mail that, because of the projected budget hole next year, “I have no plans to make use of the money in the current fiscal year.”
The anticipated general fund deficit next year is the result of lost timber payment revenue and decreases in property tax revenue due to the recession, plus rising employee costs, Lane County budget manager Christine Moody said.
Bozievich and Stewart didn’t identify any specific areas of the county budget they might want to see bolstered in the next fiscal year.
Leiken noted that the budget process for next year will begin in April and that the board will consider comments from the public and the county’s volunteer budget committee as it determines spending priorities.
“We need to be very strategic on how we use these limited dollars,” he said in an e-mail.
Conversely, Commissioner Pete Sorenson said he would like to use timber payment funds to restore funding immediately for an internal auditor position to track the county budget.
“This would save money” for the county, he said in an e-mail.
Budget manager Moody said the auditor position already is funded in the current county budget — at a cost of $138,451 — but the position is not filled. If the position remains vacant until next summer, those dollars would be rolled over into the next budget, she said.
Commissioner Pat Farr did not respond to requests for comment last week on how he wished to use the renewed timber payment funds.
The county board also will need to set spending priorities next fiscal year for the road fund, traditionally a mix of gas tax and timber payment revenues. That fund mostly is used to cover maintenance on county roads, but in recent years it also has been tapped to help pay for sheriff’s patrol deputies.
This budget year, about $4 million is being drawn out of the road fund to pay for deputies — a move that has allowed the county to restore 24-hour patrol coverage for the first time since 2010.
The fund’s long-term health is in jeopardy because of the additional expenses, however. Its reserves have been spent down rapidly since 2010, decreasing from $45 million to a projected $13 million by next summer.
The fund is expected to see its revenues continue to fall next year, although the renewed timber payments will provide some additional stability.
Stewart said he supports maintaining 24-hour sheriff’s patrols next year and using road fund dollars to do so.
“At this point, we don’t have another revenue source to pay for those patrols,” he said.
Bozievich agreed, saying the arrangement is necessary for “at least one more year while we try to find a more stable source of funding for rural patrol.”
Sorenson, however, said he wants the road fund to be utilized “for roads, streets, bridges, bike paths and the related ‘road fund’ purposes,” as opposed to sheriff’s patrols, and for the board to try and replenish the fund’s reserves next year.