Revenue Stream Drying Up
Inadequate police protection, less funds for local schools, severe layoffs for municipal workers. These are some of the coming attractions for Douglas County funding because one of the western states’ major sources of revenue for the last 100 years, known as the O&C fund, runs out in 2012. The source of the O&C Fund, which originated in 1916, is receipts on harvested timber.
Also known as the Timber Safety Net, the Oregon and California Granny Fund is a program that supplements lost taxation due to what basically amounts to the federal government renting 4 million acres of Oregon property.
The payments were originally given to Oregon and California as compensation for agreeing to leave acreage off private property tax rolls. Unlike other states which can rely on property tax revenue or state sales taxes for most of their state lands, Oregon is not set up for either of those options.
The issue stems from a land deal in 1886, when 4 million acres of Oregon land were given to a railroad in exchange for building a line from Washington to California, with the stipulation that the railroad sell 160-acre parcels to settlers. Because the railroad never sold the parcels, in 1916 the Chamberlain- Ferris act returned the land to the federal government. Interestingly, the land went back to the U.S. rather than to Oregon; however, the federal government agreed to pay Oregon 50 percent of the revenues from this land’s timber sales. Why not 100 percent? It was like the government charging you for something you already own.
In 1937, the take increased to 75 percent for Oregon’s cut of revenue from these lands, but decreased back to 50 percent in 1960.
Losing the O&C monies in 2012 will be devastating. As Oregon House co-speaker Bruce Hanna explained to ASUCC officers during a March visit to the capitol, “There is a good chance that by June of this year, our timber counties would be headed to insolvency.”
Other news agencies as radio station KLCC are also reporting on the insolvency. According to KLCC, Curry County Commissioner David Itzen will have to terminate the employment of 48 of the 78 paid employees from their general fund. And by July 1 there will be zero funding for Curry County road deputies and they will be $3 million in the hole, according to Itzen as quoted in KLCC.
UCC is not funded by O&C funds, but it is attended by students and faculty who are either family members or friends of those employed by our municipal services. The extinction of O&C funding is going to impact everyone living in Douglas County. Therefore, we need to first become educated, more so than this one article. Then we need to become advocates, contacting Hanna and our local congressmen of our desire to make certain we do not become like Curry County. Finally, we need to take action, not settling for anything less than a change.
The following map shows how much of the state is under O&C governship. To read more about the history of O&C, click here to see this map.
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