Congress Defeats Timber Payments Bill

By Beacon Staff

The U.S. House last week rejected a bill that would have continued a program for four years that provides millions of dollars in funding payments to rural counties hurt by federal cutbacks in logging.

In Montana, counties rely on the program for funding for schools and roads, and the northwest part of the state will be hit the hardest by the loss.

Flathead County could lose $1.3 million; Sanders County about $1 million; and Lincoln County – facing the largest decrease – stands to lose almost $3.7 million, according to numbers from the Montana Association of Counties.

The program in question is the federal Secure Rural Schools and Community Self-Determination Act (SRS). The legislation was established by Congress in 2000 as a six-year funding cushion for counties affected by declining revenue from timber harvests on federal lands. Congress extended the program in 2006, but only for one year.

Rep. Peter DeFazio, D-Ore., sponsored the recent bill, which would’ve extended funding for the program by recovering lost oil royalties. A majority of lawmakers voted for the bill, but under special House rules, it was defeated. Supporters brought up the measure under rules that did not allow any amendments. The 218-193 vote in favor – largely along party lines – was well short of the two-thirds needed.

Both political parties have expressed support for the program, but can’t agree on how to best fund it. Democrats said the recent plan merely closed a loophole created when the Clinton administration failed to include a threshold requiring oil companies drilling in the Gulf of Mexico to pay royalties when market prices reach a certain level. But Republicans argued that the plan would face a likely court challenge and could violate terms of federal contracts with oil and gas companies.

In Flathead County, the roads department’s budget, already a controversial subject with area residents, will suffer the most significant loss.

Last year, the department received just more than $900,000 in SRS funding, and another $500,000 – allocated by the county commissioners – from the county’s Payment in Lieu of Taxes (PILT) funds, a related program that will also suffer from the loss of SRS.

If SRS isn’t reauthorized, SRS payments will decrease by more than 60 percent next year, or about $541,000.The county’s overall PILT funds would also drop by about $250,000, which depending on how commissioners decide to distribute the monies, could add to the decrease.

At most, the roads department could see about a 20-percent decrease to a budget that already struggles to keep up with rising costs and needs.

The county’s schools would fare much better: Losing SRS would amount to a very small amount of the overall budget, a little more than one-tenth of a percent, Susanne O’Connor, the county school’s financial supervisor, said.