June 19, 2007

County Payments Multi-Year Renewal is Added to Energy Tax Legislation

Washington, D.C. - In a continued effort to provide lasting relief for the nation's rural schools and communities, Senators in the U.S. Senate Finance Committee today won approval for a measure that would extend funding for the Secure Rural Schools and Community Self Determination Act through 2011. The amendment - offered by U.S. Senators Ron Wyden (D-OR), Max Baucus (D-MT), Jeff Bingaman (D-NM), Gordon Smith (R-OR), Maria Cantwell (D-WA), Ken Salazar (D-CO) and Jay Rockefeller (D-WV) - was included in the Energy Advancement and Investment Act of 2007. The Finance Committee is expected to pass the Energy Tax legislation later today.

"As I have said time and again, we will use every legislative opportunity at our disposal to get a multi-year renewal of the county payments program signed into law," Wyden said. "It is far past time that we get our rural communities off the budgetary roller coaster and on the road to a long-term and stable funding fix for schools, roads and public safety."

"The Secure Rural Schools program plays an important role in Montana - it provides vital funding to rural communities in the Big Sky state and across the country," Baucus said. "I've worked hard to make sure this program is funded the right way - not by auctioning off our public lands to the highest bidder. I'm committed to working together with Senator Wyden and others to get this provision passed and signed into law."

"This is a critical program that will help rural counties around the country to fund local schools and roads, and will provide significant resources to restore National Forest land," Bingaman said. "Counties throughout New Mexico rely very heavily on PILT and county payment funding to provide basic services to their residents. Under this proposal, New Mexico will gain millions of additional dollars."

"We've got to put our counties on a path to stability," Senator Smith said. "Until we have a permanent solution, these payments will be needed as the lifeblood of the county budget."

"We can't delay this critical lifeline any longer," said Cantwell. "Without an extension, dozens of rural Washington schools will go without the funding they need, students will go without new books, and countless critical services will go under-funded."

Last month, Congress approved a one - year emergency extension of county payments funding in order to head off a budgetary crisis that was threatening to force lay offs and the shut down of county services in rural communities nationwide. The Senators' proposal would extend the county payments program for an additional four years, providing counties with a predictable stream of funding which would gradually ramp down by ten percent per year through 2011. Also, transition payments would provide Oregon, Washington and California counties time to adjust to the new nationwide funding formula. The new 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 five years of full funding for Payment in Lieu of Taxes (PILT) which compensates states for loss of tax revenue from Federal lands in the state. Full funding of PILT would also provide increased funding for counties in Oregon and around the country that lose tax revenues due to the presence of Federal lands in the state.

Over 700 counties in 39 states received funding under the original Secure Rural Schools and Community Self Determination Act of 2000, which was allowed to expire in September 2006. Efforts in the last Congress to reauthorize the law failed because the Congress and the Administration could not agree on the funding source for the legislation.

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, Wyden authored the Secure Rural Schools and Community Self Determination Act to provide an alternative source of county funding by 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.