The Lane County Board of Commissioners may repeal the controversial county income tax if the federal government follows through with bills that would re-authorize federal payments to counties.
The commissioners asked staff to prepare amendments that would repeal the income tax after it was announced that a renewal of the Secure Rural Schools and Community Self-Determination Act of 2000, worth $400 million, was included in an emergency supplemental appropriations bill.
The board is scheduled to review the options for the tax Wednesday afternoon, including the amendments that would repeal the income tax if the federal funding becomes available. The board will also discuss the possibility of referring the income tax to voters, said board spokeswoman Amber Fossen.
The board enacted the 1.1 percent tax on Feb. 21 anticipating that the federal government would not renew SRS, which provided about $220 million to Oregon’s dependent counties, including $47 million to Lane County.
SRS helped fund schools, roads, criminal justice and public health in place of timber forest logging revenue and property taxes. Oregon received most of the funding because much of the forest land is owned by the federal government. The act expired in September 2006, leaving the county looking to cover funding for programs such as public safety and public health.
Before the income tax was enacted by the board, the county faced laying off about 250 public employees.
Reps. Peter DeFazio, D-Ore., and Greg Walden, R-Ore., helped get the funding included in the emergency bill, which may be introduced next week. DeFazio and Sen. Ron Wyden, D-Ore., introduced bills that would re-authorize the county payments program until 2013.
Lane County Budget Manager Dave Garnick said he will present two budgets to the county Budget Committee for the next fiscal year, one including the $47 million worth of federal funding and the other one without it.
“We’re basically moving forward under the assumption that we might get it, but we’re preparing the budget as if we’re not going to get it, Garnick said.
The resumption of the payments doesn’t mean that the county’s funding problems will be solved. Garnick said expenses such as utilities and gas have grown more than the federal funding program, which is allowed to grow only at half the inflation rate.
Even with the payments, the county is still looking at a budget cut between $3 million and $4 million, Garnick said.
“We have to start looking at the next year and say if this is a one-year renewal, then we have one year to get prepared and go through this whole process again,” Garnick said. “All we’ve done is postpone the inevitable.”
The renewal of the program depends on the U.S. Congress to vote in favor of the emergency funding bill and on President George W. Bush to sign it. Some senators have said that they don’t want Oregon to continue getting the same amount, while Bush has suggested he might veto the bill.
Garnick said if the county doesn’t know by May if the U.S. Congress will renew the program, the county Budget Committee and the commissioners will have to decide which budget to go with. If the budget with the cuts is chosen, several people will be laid off.
“It looks a little bit brighter than it was before because at least there’s some hope that it will be approved,” Garnick said. “But there’s just enough political wrangling left that I don’t know for sure that we’re going to get it.”
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