Lane County commissioners may be shaking their heads this winter from experiencing an eerie feeling of déjà vu while they prepare the 2008-2009 county budget.
What’s the same: The potential loss of $47 million in federal timber dollars, the threatened cut of county jobs and services, an Oregon representative and senator lobbying the Bush administration for more money. On top of that, county expenditures have consistently outpaced revenues for years.
This year’s motto is also the same: “Prepare for the worst, and hope for the best,” said David Garnick, head of budgeting for Lane County.
The kickoff for the annual budgeting process began Tuesday as officials worked on developing three possible budgets, one of which the county will adopt by May 30.
This decision hinges on the ability of Senator Ron Wyden, D-Ore., and Representative Peter DeFazio, D-Eugene, to get a revenue bill approved by President George W. Bush.
If passed, the bill would allocate nearly $47 million to Lane County next year, which would be reduced incrementally during the next four years.
The money is part of a federal timber payment program that compensates counties throughout the nation that have U.S. Forest Service lands within their boundaries. Timber cannot be harvested in these areas, and the federal government provides financial support for schools, roads and public safety to make up for the lost revenue.
Last year in Lane County, approximately $20 million went toward public safety, roughly $20 million to roadways, and the remaining $7 million helped to fund school districts.
Without this money, however, budget architects would have to prioritize services and assign funding until the existing revenue pool is dried up.
“You have a lot of difficult decisions to make, and it seems like there’s no good choices,” Garnick said. “We’re eternal optimists … but you do what you can.”
Commissioners were faced with a very similar dilemma during the 2007-08 budgeting process, but found a sigh of relief when they were granted a one-year extension of the timber payments. The hope was that federal legislators would be able to get a long-term payment plan passed for the 2008-09 budget.
But now the county finds itself facing the same possibilities.
“Most likely we would just get another one-year extension, and work on another four-year plan for next year,” County Commissioner Bill Dwyer said.
The three possible budgets are centered around the availability of the federal timber dollars.
Officials refer to the first option as the “renewable budget option.” This plan follows the four-year schedule drafted by Sen. Wyden, in which the county receives 90 percent of the $47 million this year, 80 percent next year, 70 percent the following year, and 40 percent in the final year.
This incremental plan is meant to “wean Lane County off of funding,” and the county could provide the same level of service they currently provide, Garnick said.
The second plan is called the “step-down option” and includes the federal allocation, but it takes a $7.2 million reduction the first year so that the next two years would not be threatened with any cuts and offer stability. Another large cut would be made in year four, before the funding runs out.
This is “kind of a middle road” where “we acknowledge the money is going away and just bite the bullet,” Garnick said.
Officials call the third budget the “no renewal budget,” – basically a worst-case scenario. In this situation, the county loses all timber funding from the federal government for the next budget cycle, and begins eliminating jobs and services to make up for it.
Dwyer suggested that an income tax might be necessary to cover the shortfall if federal timber money is not renewed.
“The money’s going to have to come from citizens … or there’s going to be some painful cuts,” he said.
But last year’s defeat of a county income tax may still be fresh in the minds of commissioners.
Garnick added that the future of county government would lie in the hands of residents if federal funding is not restored, saying, “everyone has to decide what level of government they are willing to pay for, and then live with it.”
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