News Release - United States Senate
March 20, 2007                                        

Wyden's Talks with Reid, Baucus and Bingaman
Yield Multi-Year County Payments Fix

  Multi-year renewal includes nearly $5 billion
for rural schools and communities nationwide

Washington, D.C. – U.S. Senate Majority Leader Harry Reid (D-NV) joined U.S. Senator Ron Wyden (D-OR) today in announcing a multi-year proposal to restore funding for the Secure Rural Schools and Community Self Determination Act, commonly known as the county payments law.  The proposal — which includes about $5 billion for rural schools, counties and communities through 2012 — is being offered for bipartisan consideration by Reid, Wyden and U.S. Senators Max Baucus (D-MT) and Jeff Bingaman (D-NM), the respective chairmen of the U.S. Senate Committees on Finance and Energy and Natural Resources.  Also taking part in crafting the proposal: U.S. Senators Patty Murray (D-WA), Maria Cantwell (D-WA), Dianne Feinstein (D-CA) and Barbara Boxer (D-CA).

"I applaud Senator Wyden's persistence in fighting for Oregon's rural communities," Reid said.  "This Democratic package represents a renewed Federal commitment to the people of Oregon, the rural West and the nation.  Though we still have a ways to go to get this into law, I am hopeful that our proposal, including a significant and long-term increase in funding for Payments in Lieu of Taxes, will make a very positive impact on rural America."  

"Today's proposal is a good example of what working together can accomplish," Baucus said. "I'm glad that we've reached an agreement to pump more dollars into our rural counties while keeping our public lands intact. The Administration challenged Congress to develop a plan to fund this program without selling public lands. That's what we've done."

"With Senator Reid's leadership we have crafted a lifeboat to keep rural communities afloat," Wyden said.  "This proposal will mean more than $1 billion for Oregon schools, public safety, roads, and other essential county services.  It couldn't come at a more critical time." 

"California's counties face a devastating cut in federal funding as a result of the expiration of the Secure Rural Schools program," Senator Feinstein said.  "This proposal, while not perfect, moves us miles closer to where we should be.  It is much better for rural counties in California than earlier proposals. California's most rural counties depend on this funding – to the tune of $69 million last year.  Siskiyou County, for instance, receives $9.58 million a year from this program.  Without this fix, Siskiyou would receive nothing.  The same holds true for Trinity, Shasta, Plumas, Lassen and California's other rural counties. The federal government has an obligation to these counties, and this proposal takes a major step toward fulfilling that obligation. "

"As a former educator, I am committed to ensuring that all children have the opportunity to learn, regardless of where they live. This proposal would provide our rural communities with the revenue they need to ensure those opportunities for our children," said Senator Murray. "While I realize that this is not a perfect outcome for rural communities, I am glad that this mounting crisis is being addressed. This proposal would give counties the ability to move forward with plans to improve education, upgrade roads, and provide critical public services."

"We cannot let this lifeline to rural forest communities disappear," said Cantwell.  "Without this program, many of our state's counties will see their funding for schools, first responders, and public services dry up.  So many Washingtonians in counties with little taxable land and no hope of replacing this critical revenue are depending on us to extend County Payments."

The Senators' proposal would immediately resolve the budget crisis confronting rural communities by fully funding the county payments program for 2007.  This five-year plan gives counties a predictable stream of funding that allows counties to plan for the future with a gradual ramp down of funding by ten percent per year through 2011, providing 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 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.  

About $500 million of the $5 billion package would be paid for with emergency spending in 2007 and tax loophole closures identified by the Senate Finance Committee Chairman, Senator Baucus, would pay for the following four years.

Over 700 counties in 39 states received funding under the Secure Rural Schools and Community Self Determination Act of 2000, which was allowed to expire in September 2006.  Despite repeated efforts by the Senators to reauthorize the bill last year, the Congress and Administration could not agree on a 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, 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.

Secure Rural Schools Extension and Reformulation & Full-funding for PILT

• Provides for about $2.8 billion in funding for a multi-year extension of the Secure Rural Schools and Community Self-Determination Act ("County Payments") and for about $1.9 billion to fully-fund PILT.
• Provides a one year extension of the County Payments program and designates the $526 million in funding for the extension as emergency funds.
• Provides for 4 more years of County Payments funding beyond 2007, with the total funding level gradually declining to $379 million in 2011.
• Includes a more inclusive formula for the distribution of County Payments, and Oregon, Washington, and California are provided additional transition funding in early years to minimize effects of the new formula and the overall decline of the total authorization level.
• Provides for full-funding of the Payments in Lieu of Taxes (PILT) program from 2008 through 2012.
• All funding beyond FY07 will be fully paid for by a combination of tax offsets.