By David Jennings
Senator Wyden’s new O & C Bill will not stop Coos County government’s long slide towards insolvency. Historically O & C payments comprise 50% or more of the County’s discretional revenue. 
For example, in Fiscal Year (FY) 2007-2008 this payment was $6.8 million and 56% of the County’s discretionary fund. According to the Coos County Budget Book O & C payments declined to $4.7 in FY2010-2011 and dropped to $1.8 million by FY 2013-2014.
O & C discretionary revenue can be used for any lawful purpose – unlike dedicated funds that can only be spent for specific things. Most of Coos County’s Law Enforcement services – Sheriff’s patrols, Jail, DA’s Office, and Juvenile Department are primarily paid for by discretionary funds.
Coos County government has the third lowest property tax rate – $1.08 per $1,000 of Oregon’s 36 County governments. Historically O & C payments were substantially higher then County property tax revenue. For FY2013-2014 Coos County received $4.4 million in property taxes. The yearly cost of the Sheriff’s criminal and jail divisions is $8.2 million. Even if all the property taxes and O & C payments were used to fund these divisions it wouldn’t be enough.
The County does have some other discretionary funds, mainly from the County forest, but they are insufficient to pay for Law Enforcement. Most dedicated County funds can’t be used for these services.
To cover the drop in O & C revenue the county has drawn down millions from its reserve funds. If this continues Coos County will become insolvent.
Senator Wyden’s bill does not fix this problem. Wyden’s website says his bill will double the timber harvest on the O & C lands “compared to the last 10 years”. The site references a prediction by forest scientist Dr. Norm Johnson that the harvest will cut “300-350 million board feet per year for the next 20 years”. Wyden’s bill would prohibit clear cuts or the harvesting of any old growth trees on O & C lands. The bill also requires that large stands of timber and some individual trees be left standing in the areas that are logged.
Senator Wyden’s website estimates his bill will generate between $17-19 million per year in revenue to be divided among the 18 O & C counties. According to the Wyden website O & C payments for this fiscal year totaled $35 million. By his own estimate Senator Wyden’s proposal would drop O & C payments to about half of their current low level. A press release from the association of O & C counties states there was a yearly “historic average of $134 million for local communities from O & C lands”.
It is unclear exactly how much money the Wyden bill would provide Coos County. Using assumptions based on data from Senator Wyden’s office Headwaters Economics, a Montana think-tank, estimates the FY2014 payment to Coos County would range from a low of $926,375 to a high of $990,777. This is about six million dollars below Coos County’s yearly historical average.
The Headwaters estimate may be overly optimistic. The Association of O & C Counties believes that Senator Wyden’s burdensome harvest requirements may substantially reduce his revenue projections. Some sources in county government tell me they believe the Wyden bill might provide only $500,000 yearly to Coos County.
Senator Wyden’s bill also merges Coos Bay Wagon road land into the O & C lands – traditionally they were separate – but does not increase Coos County’s share of O & C revenue. The Coos County commissioners continue to hope for legislation that would provide the County revenue from the Wagon road. A November story in The World reported that Commissioner Bob Main estimates this land could generate $8 to 12 million per year in County revenue.
Senator Wyden acknowledges that his legislation will not adequately fund County government. He says that he will introduce separate legislation to provide additional County revenue but we don’t yet know how much.
The Association of O & C Counties is highly critical of Senator Wyden’s bill. The Association prefers a House bill authorized by Representatives DeFazio, Schrader and Walden. The Association believes this bill can generate $100 million annually in O & C revenue. The House bill passed the House in September. However, Senator Wyden says the house bill can’t pass in the Senate. The Whitehouse states that even if the House Bill somehow does pass the Senate President Obama will veto it.
As Congress prepares to adjourn for Christmas vacation the future of County government appears as murky as ever.
