April 04, 2007

Senators Continue Fight for Rural Communities

Amendment works to fully fund one-year extension of county payments safety net

Washington, D.C. - Working to reinstate vital funding for the nation's rural schools, roads and services, U.S. Senators Ron Wyden and Gordon Smith are filing amendments to authorize and fully fund a one-year extension of the Secure Rural Schools and Community Self Determination Act of 2000, commonly known as the county payments law.

Despite the Administration's commitment to enact a one-year fully-funded extension of the county payments safety-net, the law was allowed to expire in September. A one-year extension of the program, including a portion to be paid out of timber receipts, would provide up to $500 million nationally for 700 rural counties in more than 40 states. The Senators' proposal would fully fund the extension — without a new tax or raising existing taxes — by closing a tax loophole that currently allows government contractors to avoid their tax obligations.

"The county payment's program has been a lifeline for our rural communities," Wyden said. "It would be unconscionable for Congress to recess for the year without ensuring that our schools and law enforcement officials have the resources they need to keep their doors open. Our amendment offers a fiscally responsible way forward."

"We need a long term solution that Oregon can depend on," Smith said. "We will continue to pursue every available funding avenue until the county payment program is extended. Congress must not default on its obligation to Oregon."

The Senators' proposal would provide a revenue stream for county payments by withholding Federal taxes from payments the Federal government makes to government contractors providing goods and services. The Federal government does not currently withhold taxes on payments made to government contractors and a recent study by the Government Accountability Office revealed that a surprisingly large number of those contractors have never paid their federal taxes.

The Senators filed the amendment to the tax extenders bill and plan to file it on the Continuing Resolution. U.S. Senators Patty Murray and Maria Cantwell also cosponsored the amendments.

The Secure Rural Schools and Community Self Determination Act of 2000 established a six-year payment formula for counties that receive revenue sharing payments for the United States Forestry Service (USFS) and Bureau of Land Management (BLM) lands. Based on historical timber receipts, the formula established a stable source of revenue to be used for education, roads and various other county services in rural areas.