Siskiyou Forest Budget  Parts 1 &2, 3/17/07

The news has been filled with the budget woes of southern Oregon counties and the cuts in services that County Commissioners have made. The budget crisis is an outcome of Congress' failure to reauthorize the Secure Schools and Communities Self-Determination Act (SSCSDA,) which terminated in 2006. Siskiyou County is also experiencing the same loss in revenue. Basically, we are now facing a $4 million drop in our Road Department budget for fiscal year 2007-08, which is approximately one half of that department's revenue. Like the Oregon counties, the Siskiyou County Board of Supervisors must decide how to adjust to this loss.

Back in the early 1900s, the federal government removed large forested areas in the West from private settlement and development under the homestead laws. These became our National Forests. The stated purposes of the Forests were to (1) ensure "a continuous supply of timber for the use and necessities of United States citizens"; and (2) to secure favorable conditions of water flows. It was established that the economic well-being of the citizens of a state wherein timber is located was to be considered in administering the National Forests.

These land set-asides created many small communities that are entirely land-locked by National Forests. This: (1) limits Forest-dependent communities from growth and the creation of a local self-sustaining tax base; (2) requires visitor services for which the federal government pays little, if any, taxes; and (3) removes resources from economic development under a private free-market economy. (About 63% of Siskiyou County is currently government "owned" land.) To compensate, a system was devised by Congress to allocate 25% of the net revenue from products sold off the Forests to the County for schools and roads. For instance, in 1989/90, Siskiyou County government received $4.2 million in these revenues ­ primarily from timber harvest.

When the Northwest Forest Plan (NWFP - northern spotted owl plan) was put into place, restrictions on harvest were imposed. According to its Land and Resource Management Plan, the targeted Allowable Sales Quantity (ASQ) for timber production on the Klamath National Forest under the NWFP is supposed to be 440 MMBF (million board feet.) over a 10 year period - or approximately 44 MMBF a year. This harvest target was to consist of commercial species of trees at least 13 inches in diameter at breast height (DBH) and 50 feet tall. (The Klamath actually grows about 654 MMBF a year.) Due to environmental appeals and suits, the increased costs of additional "Survey and Manage" requirements and the loss of personnel capacity, the Klamath has been harvesting only about 14-15 MMB a year. Recognizing this shortfall, Congress passed the SSCSDA providing payments to the counties based on past average pre-spotted owl timber receipts. This was to bridge the ramp-up time until the Allowable Sale Quantity production was in place. (Thanks to extreme environmental pressures, these promised harvest levels never materialized.) In 2003-04, Siskiyou County received a total of $9,106,000 in revenues from this act. About $3,870,000 went to county schools and an equal amount to county roads. Approximately $686,500 went to the Siskiyou County Resource Advisory Committee (RAC) and another $686,500 to offset impacts of County services for search and rescue, fire and other departmental expenses related to the National Forest.

Now that the Act has sunsetted, payments revert to the old 25% formula. The severe reduction in harvest, along with the new Stewardship Contracts which pass nothing through to the Counties, means that we are receiving $250,000 rather than $4 million.

Rural Forest Counties and schools have been working with Congress to get a reauthorization of the SSCSDA legislation. Congressman Herger and Senators Feinstein and now Boxer are working for reauthorization. However, many in Congress now view these payments as "pork" or "County welfare." The urban public no longer appreciates the burden of federal lands on county services, not to mention the costs to local economies of extreme preservationist policies on the productive use of forest resources.

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Most people are surprised to find that their property tax monies do not fund county roads. Revenues to fund roads have come from the following sources: 50% of funding from either the 25% "timber receipts" for harvest on federal lands, (or the federal Secure Rural Schools and Communities Act monies to make up for the drop in harvest on federal lands); 35% of road funding from gasoline taxes; 8% from other federal exchange programs and 7% from Proposition 42. Next fiscal year 2007-08, revenues from gas tax money and other federal exchange programs will remain the same. There will be no Proposition 42 monies, although these are anticipated to double in future years. As the Secure Schools and Communities Self-Determination Act (SSCSA) has not been reauthorized by Congress, this revenue will reduce by $3.75 million by reverting to the old 25% timber receipt formula which may now produce about $250,000. In simple terms, the County Road Department will lose about half of its revenues next year (about $4.5 million.)

Under the current road budget, about 65% goes to pay for the salary and benefits of its 80 employees; 25% goes to fund overhead (fixed operational costs); and 10% is "discretionary" used to buy asphalt, rock, chip seal materials and to pay for equipment replacement. Siskiyou County has 1,360 miles of road and 175 bridges to maintain. This discretionary budget translates to roughly $750 a mile. Materials alone cost $15,000 a mile to chip seal and $75,000 a mile to overlay. (This assumes using the county road crew to do the job.) At these costs, Siskiyou County has several billion dollars of infrastructure that are not currently being fully maintained. (Even with full SSCSA, the County lacks about $5 million needed to fully maintain roads and bridges.) For this reason, the County no longer accepts new roads into its system.

The Board of Supervisors will have to figure out how to compensate/adjust to the dramatic loss in revenue. If the loss is born entirely by the Road Department, road maintenance shops around the county could be consolidated to fewer locations. Reductions in funded personnel and decreased services could result in the adoption of a Road Maintenance and Plowing Priority Plan - such as limiting snow plowing to main school bus routes and discontinuing maintenance on certain roads.

One option is to shift funding from the General Fund - over which the Board has some discretion. This is the pot of money that also funds: the Sheriff, Jail, Probation, District Attorney, Public Defender, Planning, Building, Assessor, Auditor, Recorder, Treasurer, Clerk, Administration, Agriculture, Libraries, County Counsel, Veterans, Museum, Farm Advisors, Economic Development and Tourism. This option could affect funding and services in these other departments. (As mentioned in prior columns, Behavioral Health, Public Health and Human Services are funded largely with ear-marked pots of money that cannot be shifted to other uses.)

Congress is still haggling over attaching some form of SSCSA monies to one bill or another. Statewide, an initiative could be put before the voters to add an additional .5% to the sales tax to fund roads. Locally, voters could consider a tax on heavy trucks - such as gravel, log and bottled water trucks to pay for their road impacts. Traffic impact fees could be levied on developers to improve their local roads. The County could pass permit review fees and charge for encroachment permits.

In any event, this will be a difficult budget year.