Feds want $18 million back from timber counties

JEFF BARNARD and BEN NEARY | March 29, 2013  

GRANTS PASS, Ore. — The U.S. Forest Service's demands that rural timber counties pay back millions of dollars in federal subsidies under automatic budget cuts have outraged members of Congress from both parties and caused concern in those counties with struggling economies.

Thirty-one members of the House this week sent a letter to the Obama administration protesting demands that they return $17.9 million in revenues that pay for schools, roads, search and rescue operations in rural counties as well as for conservation projects.

"For the administration to announce three months after the disbursement of these payments that they are subject to the sequester, and that states will receive a bill for repayment of funds already distributed to counties, appears to be an obvious attempt by President Obama's Administration to make the sequester as painful as possible," said the letter organized by House Resources Chairman Doc Hastings, R-Wash., and signed by 30 others, including Democrats.

Forest Service Chief Thomas L. Tidwell sent letters to 41 states telling them they need to repay $15.6 million disbursed in January under the Secure Rural Schools Act, which since 2000 has sent billions of dollars to 700 rural counties to make up for reductions in federal logging revenues due to fish and wildlife protections. The top recipients have been Oregon, California and Washington.

Tidwell also demanded the return of $2.3 million in other payments. He said the money needed to be repaid because it was sent out in fiscal year 2013, and is included under the 5.1 percent across-the-board federal budget cuts known as sequestration.

Many rural counties in the West also will be hit hard by Department of Interior cuts to the Payment In Lieu of Taxes Program, which reimburses counties for tax revenues they have lost by having federal lands within in their borders. The PILT program paid $393 million to over 1,850 counties last year, and this year those payments are also being cut by 5.1 percent – about $20 million.

Members of Congress questioned the need to repay money disbursed by the Forest Service because the money had been appropriated in fiscal year 2012.

Many rural counties in Oregon were already struggling as money from the Secure Rural Schools Act was reduced over the years. The law has expired, and the last payments went out in January.

Douglas County Commissioner Doug Robertson, president of an association of Oregon timber counties that receive the funds, is hoping Gov. John Kitzhaber will offset the $3.6 million Oregon would have to repay by taking it from funds already dedicated to conservation projects on federal lands. That would spare struggling counties from having to come up money they have already spent.

"We never see that money anyway," Robertson said. "It'll work out."

Bob Rolston, a Sheridan County commissioner and president of the Wyoming County Commissioners Association, said commissioners across Wyoming are concerned about losing PILT funds, which amount to 25 percent of the annual budget in some counties.

"These are taxes that are due to the counties from the federal lands that lie within those counties," he said. "The way we look at it, if you don't pay your taxes, the sheriff's going to sell your property on the courthouse steps. They seem to think they don't have to pay the taxes, and that's the way it goes."

Jessica Kershaw, press secretary with the Interior Department in Washington, D.C., said "Interior was not afforded discretion to exempt PILT from the sequester."

Wyoming Gov. Matt Mead has expressed frustration that federal agencies are dribbling out word of how they're implementing the funding cuts.

Earlier this week, Mead said he was outraged that the Department of Interior announced it is cutting $53 million in federal mineral royalty payments to the state, the nation's leading coal producer.

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AP reporter Ben Neary reported from Cheyenne, Wyo.