SUPERIOR — Mineral County has a road department of four, a population of 4,200 and a budget just north of $4 million.
When it faces a hit of $750,000 pending action from a fickle Congress, questions arise that have no good answers.
“People say cut, but I don’t know where,” Commissioner Roman Zylawy said last week. “How do you make up $750,000 with cuts?”
Just as perplexing: How do you dig out by taxing a conservative, sparsely populated county that elects its officials on the premise that they won’t?
Mineral County that had no contested races in the 2014 general election because no Democrats ran in the primaries.
Duane Simons said county extension agent Kevin Chamberlain has done the math and figures it would take a five-fold increase in the tax rate to make up the difference.
“How do you raise taxes on 4,000 people?” asked Simons, the west-end commissioner. “How many of those people even pay taxes?”
It’s not a pretty picture for a county that has watched its economic base trickle away with the timber industry.
“I haven’t been sleeping very well lately,” Simons said.
Mineral County’s plight is one of the more dramatic, but commissioners from forested counties across Montana and the West are tossing and turning after Congress failed to reauthorize the $330 million Secure Rural Schools Act during last year’s budget wars.
Unless a bill introduced before last week’s recess in the U.S. Senate finds success, SRS funding for Montana counties will plummet from $21.3 million to $2.07 million this year.
Lincoln County will lose a whopping $4.4 million — more than 16 percent of its total budget.
Montana counties have received their vastly reduced checks for the year. Mineral County’s share dropped from $1.2 million to $65,000 — nearly two-thirds of which goes to the road department and one-third to the three school districts in the county.
Funding has reverted to the Twenty-Five Percent Fund Act, a 1908 measure signed into law by President Theodore Roosevelt. It was enacted to offset property tax losses to forested counties shortly after the U.S. Forest Service was created.
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The 25 Percent Act awarded counties 25 cents for every dollar the Forest Service reaped on national forest land, mostly through timber sales but also via grazing, recreation and other fees.
By 2000, timber sales had dropped so precipitously that SRS was adopted to make up the difference. It was based on the average of the three highest years of 25-percent payments from 1986-1999.
The original act expired after five years. It received an emergency appropriation in 2007 and was reauthorized with some changes for four years in 2008. Congress renewed SRS in 2012 and 2013, then didn’t last year.
“This is a unique challenge to Western states that are surrounded by federal lands,” Sen. Steve Daines, R-Mont., told the Missoulian on Friday. “When you sit down with a member from most other states in this country and you say, ‘I have counties that are 80-percent owned by the federal government,’ that’s completely new. They’ve never heard that before because they never experienced it.”
Daines supports the act that Sen. Jon Tester, D-Mont., co-authored with other senators from the West. It would restore SRS funding to 2011 levels and restore mandatory funding for the Payment In Lieu of Taxes program. In Montana, PILT payments are made to 55 counties that encompass federal lands that local governments can’t tax.
PILT funding is tied to that of Secure Rural Schools, said Mark Haggerty of Headwaters Economics. But there’s a year’s lag this year between the time the SRS funds were lost and when PILT rises to help compensate for the loss.
In introducing the bill, Tester said, “Counties across Montana are taking a hit because some in Congress don’t understand rural America.”
County commissioners understand it well, but say they have a hard time figuring out Washington.
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“Most of the lawmakers around the country, this is just not on their front burner,” Zylawy said.
He said the inability to cut merchantable timber on federal lands precipitated the Secure Rural Schools Act and is at the root of the problem.
“We sometimes call SRS ‘Western welfare,’ and while we don’t like welfare money, what do we do if we aren’t able to log out here? It’s what we used to rely on,” he said.
Mineral County’s four-man road department isn’t responsible for Interstate 90 that runs through the middle of the county. But there are miles of other roads and bridges to be plowed, graded and maintained, Simons said.
The county has removed itself from the road-building business. It requires that road construction and upkeep in new subdivisions be the responsibility of homeowners associations.
The county’s four-man road department includes just one, the foreman, who makes more than $20 an hour.
“We really don’t have any fat to cut there,” said Zylawy. “We hardly ever buy new trucks, hardly ever buy new equipment.”
Much the same is true in other county departments. There are no more than 55-60 people on the county payroll, even if you count part-time workers.
“The starting wage is $8.65, so how many employees would you have to cut to save $750,000?” Zylawy wondered.
State law requires the county to provide emergency services, namely with a sheriff’s department that is chronically understaffed as well.
“So we can’t cut there. We’re left with cutting our four-man road department or closing down the courthouse,” said Zylawy.
As unpractical as the former option is, the latter is illegal. There’s no provision in state law for a county to declare bankruptcy, said Harold Blattie, executive director of the Montana Association of Counties, or MACo.
He said the intent of SRS was that it would serve as a bridge to allow counties time to either transition to a non-timber harvest economy or await the return of the timber industry.
“As painful as it may be, expenses will have to be reduced to sustainable levels that will eliminate entire programs and cut essential services to bare minimums,” said Blattie, adding that counties are talking about eliminating routine deputy patrols, reducing road maintenance and eliminating county fairs.
In a speech to the Legislature last week, Daines cautioned lawmakers against relying too heavily on Washington as a funding source.
“I’m just sounding some cautionary advice that we’d better be looking for how we can solve these problems here,” Daines said Friday.
He said he believes a key to a long-term solution is putting more management of federal lands into the hands of the states, though not transferring ownership.
Daines held roundtables on forest management reform in Columbia Falls, Missoula and Bozeman during Congress’ recess last week. At each stop, he warned that when the Senate returns to session Monday and the House on Tuesday, SRS funding and timber management won’t be the top priority.
“It’s about trying to balance the $3 trillion budget and how they’re going to come to grips with that,” Simons said. “Everything else is going to be secondary.”
“It’s a vast cave (in Washington),” he added, “but it’s dark enough out here in Mineral County that we’ve got our flashlights. Where do we go?”