December 05, 2007

County Payments Deal Promises $1.8 Billion Dollars for Rural Schools and Communities

Multi-year extension guarantees funding through 2011

Washington, D.C. - U.S. Senator Ron Wyden (D-OR) joined U.S. Senator Max Baucus (D-MT), Chairman of the U.S. Senate Finance Committee, today in announcing that the Senate has reached an Agreement with the House of Representatives to extend funding for the Secure Rural Schools and Community Self Determination Act, commonly known as the county payments law. The agreement - which contains more than $1.8 billion for the nation's rural schools, counties and communities through 2011 - is included in the Energy Tax Legislation which the U.S. House of Representatives is expected to vote on this week.

"Today's announcement will mean nearly $740 million for Oregon schools, public safety, roads, and other essential county services," said Wyden. "More importantly, this deal gets these counties off of the fiscal roller-coaster and back to stable funding so that they can focus on the real work of planning for the future."

Baucus, who included the SRS language in his energy tax bill, said: "This deal will throw a lifeline to rural counties across the West and pump dollars into schools, roads, and emergency services. It took a lot of elbow grease, but we are about to do the right thing for rural counties."

Today's House-Senate agreement reflects the Senate-passed proposal that Wyden and Baucus introduced earlier this year with U.S. Senate Majority Leader Harry Reid (D-NV) and the Chairman of the Senate Energy and Natural Resources Committee, Jeff Bingaman (D-NM).

Today's agreement which includes a four-year plan of gradually ramped-down funding, will give counties a predictable stream of revenue to allow these local governments to plan for the future. The plan also includes transitional payments to give Oregon, Washington and California counties time to adjust to the new nationwide funding formula. That formula is based on the current funding formula and the current acreage of U.S. Forest Service (USFS) and eligible Bureau of Land Management (BLM) lands, along with a mechanism to focus support on those communities in greatest economic need.

Additionally the plan includes one year of full funding for Payment in Lieu of Taxes (PILT) which compensates states for loss of tax revenue from Federal lands in the state.

Over 700 counties in 41 states have received funding under the Secure Rural Schools and Community Self Determination Act of 2000. The original law was allowed to expire in 2006, leaving many counties without the means to fund sheriffs' departments, schools, libraries and other local services. A one-year extension was passed in the spring of 2007.

Before the county payments law passed in September 2000, many rural counties were receiving payments as the result of 1908 and 1937 laws specifying that the government share 25 percent of USFS receipts and 50 percent of BLM O&C land receipts with counties in states that host Federal land from which timber is cut. These payments had been used to help finance rural schools and roads. Toward the mid- to late-nineties, however, the principal source of those revenues, federal timber sales, declined by over 70 percent nationwide. Consequently, the corresponding revenues shared with rural counties throughout the country declined precipitously, hurting school and transportation funding.

In 2000, legislation authored by Wyden to provide an alternative source of county funding was enacted into law, establishing a six-year payment formula for counties that receive revenue-sharing payments for USFS and BLM O&C lands. The formula established a stable source of revenue, a safety-net—or "full payment amount"—to be used for education, roads and county services in rural areas. The legislation also provided funding for ecosystem restoration, infrastructure maintenance and stewardship projects on national forests, fostering all-too-rare cooperation between counties, timber interests, and environmentalists. The safety net amount was based on historical timber receipts.

See Senator Wyden's floor statement here.