Sustainable Revenue for Oregon Counties

Mr. Merkley:

Mr. President, today I am introducing the
Sustainable Revenue for Oregon Counties Act, a bill aimed at finding a
sustainable long-term solution to the revenue problems faced by Oregon’s
timber-dependent counties and other timber-dependent counties across our
Nation. This bill, which is cosponsored by Senator Ron Wyden, will establish a
task force to determine the best way to provide counties with a dependable
source of revenue after the current county payments program expires.

Last year I promised that county payments would be the
subject of my first bill as a Senator because addressing this issue is
essential to the long-term success of Oregon’s rural counties. Thanks to the hard
work of Senator Wyden and our congressional delegation, payments are in place
for the next 2 years. But we need to start preparing for what happens next.

Let me give some background on this critical issue. Like
many Western States, the Federal Government owns much of Oregon’s land base.
More than half of Oregon’s land is federally owned. One class of the Federal
lands is the O&C lands. These lands were granted to Oregon & California
Railroad in 1866 and later reverted to the Federal Government when the railroad
failed to live up to terms of the grant. They also included a class of lands
that originated from a similar situation, the Coos Bay Wagon Road lands. These
O&C lands make up 2.2 million acres in western and southern Oregon.

Then there are Forest Service lands–timbered lands owned by
the Forest Service, managed–that make up 14 million additional acres across
our State.

In both cases, the Federal Government has allocated a share
of the revenue generated by cutting timber to compensate local counties for
their services. Since 1908, in fact, the Federal Government has compensated
counties for the revenue lost due to Forest Service lands with a simple
formula: 25 percent of the revenue earned by harvesting timber. Since 1937 the
Federal Government has sustained a similar commitment on our O&C lands. The
O&C Act provided that counties receive 75 percent of the timber harvest
revenues, and since 1957 that was reasserted with 50 percent going directly to
the counties and 25 percent put into management.

Then along came the 1990s and something happened. What
happened is, the Federal Government started saying for other
reasons–environmental reasons, stewardship reasons–we were going to change
the harvest practices on these lands. That has had a direct impact, a deep,
profound impact on our timber counties. A deal was struck. In fact, in 1993,
President Clinton proposed and Congress enacted a program to augment timber
payments with Federal payments based on the historic harvest levels so the
people of Oregon’s timber counties will not be paying the price for the
environmental goals and other goals that were put forward. This is a deal, this
is a core foundation agreement between the Federal Government and our timber

This program was modified in 2000 under the leadership of
our senior Senator from Oregon, and the program became the Secure Rural Schools
and Community Self-Determination Act. That program, though, had a sunset in
2006 when the program disappeared that started to wreak havoc on our timber-dependent

In Josephine County two-thirds of the county’s general fund
came from county payments. Loss of county payments meant cutting public safety
programs. Overnight, patrols were down to one 10-hour shift split among six
deputies covering an area the size of the State of Rhode Island.

In Harney County–where 78 percent of the landmass, an area
the size of New Jersey, is federally controlled–70 percent of the road funds
come from Federal payments.

In Lake County, Federal land, making up 61 percent of the
county, is in anticipation of losing Federal funding, so the county had to cut
its Federal Road Department from 42 individuals to 14–14 for a road department
for a county the size of Connecticut and Delaware combined.

In Jackson County, where one-third of the general fund comes
from Federal payments, Jackson County eliminated 117 jobs in parks, human
services, roads, public safety, and closed all of their libraries.

This issue was so substantial that the Oregon Legislature,
when I served as speaker, redirected more than $50 million in transportation
funds away from counties under the normal formula to a formula based on the
loss of the Federal timber dollars.

The good news is that due to the tireless work of the senior
Senator from my State, Mr. Wyden, and our colleagues in the other Chamber,
counties received a 1-year reprieve in 2007 and just last fall a 4-year
extension. But now we are faced again with expiration of these critical
resources in 2011. So today I am here to propose a strategy to develop a
coherent plan, a plan for restoring fiscal security and sustainable revenue to
our counties so that, despite the crushing economic situation our counties are
facing today–and unemployment is second highest in the Nation in Oregon, and in
the timber-dependent counties far higher than the average, many with 14, 16, 18
percent unemployment–despite that, we need to provide a foundation for
transition in 2011.

There are many elements that can go into this coherent
strategy. Our forests, millions of acres of second growth forests are overgrown
and need to be thinned to restore forest health and prevent forest fires.
Increasing the harvest could generate revenue. The material cleared from the
forest could be used to generate biomass energy and cellulosic biofuels, and
harvesting that material, that biomass, could generate revenue.

Our forests can be used to sequester carbon, and the forests
of the Northwest are potentially the largest carbon sink we have, so management
to increase carbon sequestration could be a source of revenue.

Increased use of public lands by visitors brings economic
benefit to our counties and these recreational and tourism activities could be
a source of revenues.

Certainly, we need to look at the historic deal struck between
the Federal Government and the counties and find a way to sustain it into the
future–that deal saying, if we are going to put restrictions on the timber
harvest under these traditional timberlands that we are going to compensate
counties for the lost revenue.

This bill creates a task force with 15 members. Four members
come from timber counties. They get their firsthand reports from the front
line. One member each represents timber, conservation, recreation, and labor
organizations–as well as a member from the Governor’s office and a member from
Oregon’s tribes.

Then the task force will be expanded to include members who
are experts on sustainable forestry, on natural resource economics, on biomass
energy, on carbon sequestration, and on habitat conservation.

This task force is charged with developing a long-term plan
to raise sustainable revenue for Oregon’s counties, and it will consider all of
the concepts that I have mentioned, as well as others that are proposed or that
come up in the course of the task force’s work. They are going to report back
two strategies for consideration within 9 months of this bill being enacted.

Timberlands are an important part of the national economy
and an extremely important part of the Oregon economy. Timber products can be
used to help us address next generation biofuels. Timber can be used to
sequester carbon. It is a creative, adaptable building material, and our timber
counties have been hit particularly hard by the downturn in the national
housing market.

So we need to sustain the traditional deal with Oregon’s
timber counties and with timber counties across this country. That is what this
bill is intended to do. I am very proud to introduce it as my first bill as a