Curry County has been scrambling to figure out how to balance its budget, with the loss of money it used to get from the federal government. That money — known as “timber payments” was paid by the feds to counties with large amounts of untaxable public timber land.
April Baer has been in Curry County following developments Friday, and she spoke with OPB Managing Editor Eve Epstein.
EE: So, April, there was some thought that county officials might declare a fiscal emergency. Did they do that?
AB: They did not. Let’s start with a little background: back in March, the legislature designed and passed a series of bills to help out Curry and other counties - these are places that thrived on timber harvests. You’ll heard them referred to sometimes as the O&C Counties. Many of them have now fallen on hard times.
Some counties, like Curry, have had to cut their budgets so much that essential serves mandated by the state may be jeopardized - the county jail, juvenile services - things like that.
The question is: can the county re-organize its finances? WHen a person or a business does this, it’s done through bankruptcy court, but Oregon’s Constitution offers no mechanism for a city or county to handle bankruptcy. That’s why the legislature acted, creating some new tools.
EE: How big is the hole that they’re looking at?
AB: Earlier in the week, the county staved off the impending crisis at the end of the fiscal year. The Commissioners agreed to pull the monye together from three sources: they took advantage of a legislative act that gave counties permission to access money reserved for road maintenance. They had made some further maintenance reductions. And they agreed to spend some money the county typically holds in its accounts for day-to-day solvency. Accountants refer to it as working capital.
That puts the county in more or less table condition until next year, July 1st 2013. The supposition was that the commissioners would declare a fiscal emergency, under the terms of House BIll 4176. But they decided not to do it. All three county commissioners, Sheriff John Bishop, County Clerk Renee Kolen, and several other officials all expressed reservations about what declaring a fiscal emergency would mean. Primarily, they were unhappy with a provision of 4176 that would have convened a fiscal control board. The Governor appoints five members. The County Commission and other local officials make up the rest. The sticking point is that the cost of running this commission, estimated at $150,000, would be shared evenly by the state and the county. Local officials said they felt the money would be better spent elsewhere.
So they created an alternative resolution: the county, as the commissioners put it, “self-declared” a financial emergency - nominatively different than the “fiscal” emergency declaration spelled out in HB 4176. In passing this resolution, the county basically agrees it needs all the same help the state extends in 4176, but it sidesteps the fiscal commission, and its $75,000 price tag.
County Chair David Itzen said at a time when the county has cut back so much, without even full-time road deputies on patrol, he couldn’t see how the county could share the cost.
“I think what we’re acknowledging the emerging situation here but at the same time avoiding the fees we simply cannot afford to pay, which are part and parcel of HB 4176. The legislature, I think, thought that the money would be put up front. We’re not in a position to be able to afford to pay that.
EE: Does that mean the county won’t get any help from the state?
This is where Curry County has stepped into a big gray area. I talked to State Representative Bruce Hanna shortly after the meeting. He co-chaired the legislative group that drafted HB 4176, with the intent of providing a path for O&C Counties to deal with impending insolvency.
“From a legislative perspective,” Hanna said, “without the authority to provide the help, it would be difficult. From an executive branch perspective, if the Governor so chose to take a different tack on it, I suppose he could take some limited other actions.”
But again, Hanna says, this was kind of the point of passing the bill - come up with some way to give counties a way to re-negotiate some of their fiscal obligations, maybe sell off some land, call emergency elections to authorize new taxes. He was having a hard time imagining how the expense of the fiscal control board would get too high for counties to bear.
We’ve had no comment yet from the Governor’s office.
EE: What are Curry County’s options?
AB: The Commissioners are still going forward with plans for a vote next week on a sales tax. It’s not clear if they’d do that in late August, September, or maybe just wait til November. They have to weigh the cost of a special election against the urgent need for new revenue.
By the way, Josephine County just announced plans for a similar vote on a sales tax, set for May.
EE: What was the mood at the Curry County meeting?
AB: Really very emotional. There was a high degree of frustration. Many elected officials said they felt the legislature is out of touch with what’s happening and what the limits of the local economy can bear.
The Commissioners are very sensitive to criticism that the county might not have cut services enough, or tried to raised property taxes. Commissioner George Rhodes was emphatic that the constraints on the County’s tax base are unlike that of any other county in Oregon. Curry is basically three cities along Highway 101, with an awful lot of rugged federal forestland to the east. He says even if the county doubled or tripled its admittedly low property taxes, he says it would not raise enough revenue to fill the budget hole Commissioners are dealing with.
“About 4% of the land mass in Curry County is buildable.” Rhodes said. “Most of it has already been built on.
The argument about Curry County citizens don’t pay enough taxes to support the county may not be a really good argument.
EE: Sounds like a lot more negotiation ahead. Thanks April.
AB: My pleasure.