Rural Oregon counties face financial uncertainties as federal funding sources shrink

For decades, rural Oregon counties that contain large swaths of federally owned forest land have depended on a share of timber revenues from federal logging to fund schools, law enforcement and other essential public services. These payments were originally meant to offset the loss of property tax revenue that counties could not collect on federal lands. But when logging on these lands slowed drastically in the 1990s due to new environmental protections — like the Endangered Species Act — those payments plummeted. 

 

In response, Congress stepped in with a temporary fix: the Secure Rural Schools Program. First passed in 2000, Congress reauthorized it multiple times over the years until it allowed it to expire in 2023. Congress which it enacted in 2000 and reauthorized multiple times until it expired in 2023. The lapse in the SRS reauthorization has triggered the default distribution of the significantly reduced timber revenue to counties. 

 

The federal budget process has introduced new complications as well. President Donald Trump’s One Big Beautiful Bill Act, which was signed into law in July, requires federal agencies to ramp up logging. But it also includes a provision redirecting all proceeds from timber sales on lands in counties to the federal government — threatening one of the last fiscal lifelines for rural governments to fund its core services.

 

With counties facing budgeting shortfalls that carry big consequences, questions about how to create a long-term sustainable path forward have taken on new urgency. Lane County Commissioner Heather Buch and Klamath County Commissioner Derrick DeGroot — whose counties receive the second- and third-highest federal payments in Oregon after Douglas County — join us, along with Mark Haggerty, a senior fellow at the liberal-leaning thinktank Center for American Progress to talk about the challenges Oregon’s rural counties face and what a stable funding model for these counties might look like.

 

Curry County Commissioner Jay Trost declined to participate in the conversation but provided OPB with a statement: 

Curry County has the second lowest property tax rate in Oregon at .59 per thousand of assessed value and like most Oregon Counties, we have not been able to keep up with the inflation over the past 4 years.  We had to endure a 31% reduction in the county budget for the 24/25 fiscal year, we were able to maintain that with no further budget reductions in the 25/26 budget because of timber revenues that came in and covered the annual employee role up costs.  These O&C timber funds allowed us to remain fairly status quo in terms of service delivery.  Going forward if those funds are not made available to us, we will most likely see more reductions in county services.  We are working diligently to think outside the box, identify alternative solutions that will maximize each dollar and become more efficient. These efforts will help and are necessary, however the reality remains the same, if we don’t receive timber revenues, and or PILT (payment in lieu of taxes)  payments we will have to make cuts.  We remain confident that the federal legislature will correct the language needed to ensure that counties like ours that rely on natural resources revenue will not be negatively impacted.