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Timber counties face cuts

Timber communities throughout the Northwest could have millions less to fix roads and support schools next year unless Congress continues to help cover lost revenue from national forests.

In Idaho’s Kellogg School District, the loss of about $1.2 million could mean cuts in everything from technology upgrades to new textbooks and classroom supplies, Superintendent Sandra Pommerening said.

“It doesn’t affect just a specific program,” Pommerening said. “It affects our whole district.”

In Washington’s Ferry County, the loss of $400,000 in federal payments could trigger a budget crisis, said Commissioner Mike Blankenship.

“That’s half of our snowplow budget. I’m not sure where I’m going to make it up,” said Blankenship, who added that the cash-strapped county already is letting some paved roads go back to dirt roads because it can’t afford maintenance. “This $400,000 could be the end to Ferry County.”

At stake are payments the federal government has made to counties – mostly in the West – where national for- estlands make up a significant portion of a county’s area. National forests are exempt from property taxes, but when they were set up nearly 100 years ago the federal government began sharing revenue from timber harvests on federal land.

For decades, that money – known as Payment in Lieu of Taxes, or PILT – was shared between the counties and school districts.

But when challenges to timber harvest practices caused drastic reductions in harvests – and in PILT revenue – Congress looked for another approach to compensate those timber counties. In 2000, it passed legislation written by Sens. Larry Craig, R-Idaho, and Ron Wyden, D-Oregon, to use federal tax money to supplement the declining revenue generated by the forests.

The money, which came to be known as Craig-Wyden payments, was authorized for six years. In 2006, Idaho counties and school districts received a total of $20.4 million for roads and schools, and Washington counties and school districts received a total of $47.3 million.

But last year, Congress failed to reauthorize the legislation, leaving the school districts and the counties in doubt of whether that money will be available for their 2007 budgets.

“Without that funding, then we stand to be in pretty sad shape,” Pommerening said.

That scenario confronts other Idaho districts that rely on the funds.

“It buys our textbooks. It pays for our boiler system. It pays for our lights. It pays for our supplies,” said Robin Stanley, superintendent of the Mullan School District in Shoshone County. “If the roof leaks, we gotta find someplace to go get the money, which means we’d have to rob it from some other programs.”

The money prevents the district from asking for more taxes and prevented big cuts during the state budget shortfall in 2003, he said: “It’s been our emergency money. Had we not had that, we would have been laying teachers off and eliminating programs left and right.”

In Washington, the federal payments for schools go to the state, which sends the money to the school districts with other state funding. Washington school officials believe the state will replace the federal money with state funds.

But the counties won’t get their federal payments replaced by the state. Stevens County Commissioner Merrill Ott said his county stands to lose about $250,000 and “to us, in our small budget up here, that is huge.”

This week, the Senate will look at ways to help those counties and school districts. A Senate Energy and Natural Resources subcommittee has scheduled a hearing for Thursday on a proposal by Wyden to extend the payments through 2013. It has the support of many other Northwest senators of both parties, and a similar bill in the House has bipartisan regional support.

Sen. Patty Murray, an early co-sponsor of the bill, said recently she was disappointed Congress didn’t reauthorize payments last year: “Now we are down to the wire and schools in our rural communities are at risk.”

But Craig is set to offer a different proposal that would continue some payments for as long as 10 years, gradually reducing them to wean counties and schools off the system. It would also readjust the formula, which currently has about half of all payments going to timber counties in Oregon.

Craig believes the payments were set up as a temporary fix, his spokesman Dan Whiting said Tuesday. He also thinks payments should be tied in part to the revenue from local forest projects.

As part of a compromise in 2000, payments to the schools and counties were “decoupled” from revenue by timber sales in the forests, to avoid any suggestion that counties would cut more timber to make more money, Whiting said. In exchange, timber communities set up Resource Advisory Committees, with a range of different interest groups, to decide on projects.

But county officials say in many parts of the West, few or no projects are going forward.

The old law really created a “patch” on a system that’s broken, say county and school officials in timber communities.

“We have national forests that are no longer producing,” said Ott. “The real solution is better management of the forests.”

Sherry Krulitz, chairwoman of the Shoshone County commission, where Craig-Wyden payments amounted to about $1.7 million in 2006, agreed. About 75 percent of the county is national forest, so the remaining 25 percent must pay the taxes that support local government services.

This year, a loss of Craig-Wyden payments might mean no new graders or dump trucks, she said. In a couple of years it could mean problems finding money to pay for all the gravel, deicing chemicals or salaries the roads department needs.

“If we can fix the bigger problem without ending up in the courts … I would love to see that happen,” Krulitz said. “But it would take everybody at the table.”

One proposal last year was to cover the payments by selling off land in the national forests to private owners. It wasn’t popular with local government officials or environmental groups.

“It was only 327 acres in Pend Oreille County, and that doesn’t seem like much,” Commissioner Ken Oliver said. “But we don’t like the idea of selling off forests.”

County and school officials are marshalling forces to lobby for some sort of reauthorization of the funds.

Bob Ranells, superintendent of the Wallace School District, which stands to lose about 6 percent of its budget, said the best he and other district administrators can do is make it clear how important the funds are to their districts. But they know the decision is in the hands of members of Congress who have little or no stake in timber communities.

“My spending a lot of time on it isn’t going to do myself a lot of good right now – the awareness level’s really high,” he said. “It’s not the west-of-the-Mississippi delegation folks that’s at issue; it’s the east-of-the-Mississippi delegation folks that we don’t have much control over.”

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