In July 1993, Brookings logger Robert Gardner joins others on Highway 101 to protest President Clinton’s plan to curtail logging in nearby federal forests. Pilot file photo

The image is fitting, given Curry County’s fiscal plight.

In September, county commissioners warned Gov. John Kitzhaber that Curry County will lapse into a state of “fiscal distress” unless Congress extends the federal program that props up the county’s general fund.

Even that proverbial “act of Congress” won’t be enough, the county told the governor. “We cut our existing departments to bare minimum,” the county’s letter said. “Any further downsizing will result in dysfunctional county services.” 

If Congress fails to act, officials say the county could be broke by January 2013. Even with the proposed help, county government still faces a revenue gap in the near future. 

Curry County’s financial problems are tied to the abundance of federal forests within its boundaries. The federal government owns two-thirds of the county’s land, yet pays no taxes on that property. Historically, revenue generated from logging on some of these federal forest lands was shared with the county and schools. But in the 1990s, environmental restrictions brought federal logging to a near standstill.

For more than a decade, federal subsidies have helped Curry County survive. But the payments have been a mixed blessing, supporting core services even as they undermine efforts by local officials to find other revenue – by raising property taxes, for instance.

These factors, exacerbated by Curry County’s demographics, have driven the county, fiscally speaking, to its knees.

Not so long ago, Curry County flourished. Lumber mills dotted the landscape. Young men put themselves through college by working in the forests or the mills.

At one time, recalls Roger Thompson of Brookings, there were a dozen mills in the Brookings area alone – including one operated by his father Walt.

Curry County fared so well, according to local lore, that county commissioners declined to collect property taxes during some periods in the 1950s; the county didn’t need the money. The county was even able to give money to its cities – Brookings, Port Orford and Gold Beach – to help build their city halls.

Now, facing a withdrawal of federal support payments that were meant to replace timber sale revenues, the county might not have enough money for even the most basic of services.

That could mean no sheriff’s deputies to patrol county roads. Taxes could go uncollected. Getting a marriage license, a passport or a building permit might require a trip to a neighboring county.

As timber harvests declined, the first help from Congress created a “floor” for federal timber payments in the early 1990s. When the Northwest Forest Plan failed to created a stable supply of timber sales, more direct subsidies started.

A decade ago, Congress passed the Secure Rural Schools and Community Self-Determination Act in 2000-2001. The legislation sent millions of dollars every year to counties that had once relied upon federal timber harvests. These federal payments accounted for about 37 percent of Curry County’s general fund budget two years ago.

By design, the annual payments to rural counties have declined. For the upcoming budget year, timber funds will make up only about 12 percent of Curry County’s general fund. 

The program itself is temporary. After several extensions, the program expired this September. In the current federal budget climate, it’s not clear whether Congress will resurrect the program.

Even if it does, the amount of money under consideration will be insufficient to meet Curry County’s needs. The result, according to one former commissioner, would be “death by a thousand cuts.”” 

The county’s letter to the governor has led state help in forming a special Citizens’ Committee to explore all the options. 

“The purpose of this committee is to identify and explore all viable revenue and expenditure opportunities to acheive fiscal solvency and stability for Curry County Governement now and in the future,” says the county’s recruiting notice.

Applications are due by 5 p.m. today through the commissioners’ office; the commissioners hope to make appointments next Tuesday.  The state’s Oregon Consensus program will help with the organization and operation of the committee, with meetings starting Nov. 30. 

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The federal government’s habit of renewing support payments to cash-strapped counties may harm them even while it helps them, many county officials said. The pattern erodes the urgency that might otherwise motivate taxpayers to address fiscal problems themselves.

“If the train doesn’t wreck, I don’t believe people will believe,”” said former County Commissioner Rocky McVay.

Now as executive director of the Association of O&C Counties, McVay is one of those working toward a solution that include both the extension of federal payments and a resumption of timber harvests on the O&C timberlands held by the federal government, which would return sales revenues to the counties.

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State and county officials have known for more than a decade that Curry County was headed toward insolvency. They have known that rural counties that survived largely on timber receipts needed to plan for the day when they disappear. But making the necessary changes has been much more difficult.

The newest county commissioner, Dave Itzen, faces the same question whether he’s at a tea party gathering or meeting with members of the League of Women Voters: How could it get to this point? How, after grappling with this issue for so long, could the county be bracing for a budget shortfall of at least $2 million for the 2012-2013 fiscal year?

For the 2013-14 fiscal year, if the county were to maintain current service levels, it would need to find additional sources of revenue of at least $3.5 million.

For the current fiscal year 2011-2012, the county’s general fund budget is $8 million.

Itzen likened the county to a cruise ship with 22,000 people on board. “”We can see we’re about ready to hit an iceberg. We’ve seen that for quite a long time,”” he said. “But it’s a big ship.””

And because ships change direction slowly, Curry County’s course should have shifted long ago. But it didn’t, Itzen said, and as a result “time is an element. We’re going to hit the iceberg. Now the charge is to mitigate the damage as much as possible.””

Past officials said they and their colleagues did not merely sit on their hands with their fingers crossed. One of these is Terry Hanscam, who served on the county budget committee in the late 1970s and as a commissioner in the late 1990s. Two decades ago, said Hanscam, the county was spinning as many functions out of the general fund as possible.

“We told the library they needed to go out and form library districts, and they did,” he said, noting that libraries no longer rely on county general funds.

In 2006, meanwhile, the commission cut the general fund by laying off about 70 people, said Maryln Schafer, who was a commissioner from 2001 to 2008 and, prior to that, the mayor of Gold Beach.

“We went as lean as we could possibly go and still function,”” she said.

In 2007, then-Gov. Ted Kulongoski formed a task force to devise ways for Oregon’s rural counties to weather the expiration of federal timber payments. But many of the task force’s recommendations carried a price tag, officials said; for the most part, the report was shelved.

Last year, the county proposed a special property tax levy to fund public safety. Curry County government has the second lowest property tax rate in the state at $0.5996 per $1,000 of assessed property value.

Voters turned down the levy, with 72 percent voting no. A reader poll running on the Curry Coastal Pilot’s website has just over 50 percent saying they will oppose any new taxes. 

There’s a sign in Curry County Sheriff John Bishop’s office that reads, “Due to recent cutbacks, the light at the end of the tunnel has been turned off.”

Bishop took over as sheriff in 2008, and he’s had a front-row seat to the county’s fiscal crisis. More than 70 percent of Curry County’s troubled general fund goes to public safety, which includes everything from animal control to jail operations. 

Bishop knew the county’s predicament was serious before he took office, but he didn’t know how bad. He’s seen county budget committee members experience the same harsh education.

Initially, he said, “They think there is a way to fix this. They spend six months (working) every day on (the budget) and they come out and ... it just can’t be fixed by cutting my salary in half or the deputy’s salary in half or the pensions in half. That would fund us for two extra weeks. It’s a bigger problem than that.”

Bishop isn’t convinced community members realize how bad the problem could get.

“You’re an elderly person and you wake up and your spouse is dead. They died in their sleep. You call 911, and the medics say, ‘yes they are deceased.’ If my deputy isn’t here, who takes the body? The funeral home can’t take it until we release it,” he said.

And who, he said, would investigate burglaries without his office?

“If you did get another agency, it would be state police, and it may be days later – if they even come at all,” he said.

Because people can’t imagine such a scenario, Bishop said, they don’t believe it could happen. It’s unthinkable.

“If I wasn’t dealing with this every day, I would be right there with them,” he admitted. “But it’s a very real possibility.””

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The plight of Curry County – and others like Coos, Josephine and Klamath – led Gov. Kitzhaber to meet with the state’s congressional delegation last month for a rare focused discussion. The governor has convened a weekly work session on the problems of rural counties; a special legislative task force starts meeting this week.

Greg Wolf, the intergovernmental and regional solutions director with the governor’s office, said the solution to Curry County’s problem will not be a “one silver bullet kind of thing.””

Instead, the answer will likely be a comprehensive approach. The governor’s letter to the county pointedly suggests a local property tax increase. Presumably, Wolf said, the overall solution may  include efforts to increase revenue, coupled with some type of forest management that increases revenue.

It could even mean the elimination of Curry County as a government entity. Under such a scenario, the county might return to neighboring Coos County, from which it was carved before statehood in 1858, or be divided in half, with one portion joining Coos and the other attaching to Josephine County. However, residents are quick to point out, both Coos and Josephine counties are also hurting financially.

Wolf said the governor has asked his staff and the Attorney General’s Office to figure out which services the state must provide for Curry County residents if the county runs out of money.

Wolf said the state won’t wait for the county to fail. However, he said, “obviously, the state has its own financial problems and is not in a position to cover the loss of county payments.””

In the meantime, Wolf says the state is pushing hard for Congress to renew timber payments for another five years.

“It’s really, really important to bridge until the next revenue source (is found),”” he said.

Curry County is not alone in this predicament. Many others, including Coos, Josephine and Klamath counties, could also be facing what Curry County officials called “fiscal distress.”

“We’ll be the first domino to fall over,” Itzen said, “but “there will be others behind us.”

Next: Trying to keep federal timber payments coming is one possible solution.