A budget crisis a century in the making is coming to a head as Oregon’s rural counties wait on Congress to approve funding they’ve long relied on.

The crisis originates with a compromise from the era of President Teddy Roosevelt and was prolonged by piecemeal solutions made during the Timber Wars of the 1990s. Now, as lawmakers delay another potential stopgap, the president’s signature One Big Beautiful Bill removes a key funding source for Oregon’s timber counties.

If nothing is done, rural counties could find themselves with no money to pay for sheriff’s departments or other essential needs.

“If we’re not able to fix this, we wouldn’t be able to have a law enforcement presence in Klamath County,” said Klamath County Commissioner Derrick DeGroot.

In Curry County, the sheriff’s department already only responds to calls for life-threatening emergencies or crimes that are actively happening. Over time, Jay Trost, a commissioner there, said people will notice other services decline: more unfixed potholes, more deteriorating bridges and longer 911 response times in rural areas.

“We have to get creative,” Trost said. “That’s just where we are.”

Where timber once paid the bills

Many rural Oregon counties once relied on a portion of revenue from trees logged on federal lands to cover the costs of essential services. These counties contain huge swaths of federal lands within their boundaries — up to 70% of their land base. That federal land doesn’t generate local property taxes, which typically pay for public services, like roads, law enforcement, health departments and libraries.

So the federal government started sharing a portion of its logging revenues with those counties. When those declined, federal lawmakers came up with the Secure Rural Schools program.

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Since then, many Oregon timber counties have had a choice: receive funding from Secure Rural Schools, or get a cut of the Forest Service’s timber revenues. Most have typically gone with Secure Rural Schools since the payments were larger.

In 2023, Secure Rural Schools sent more than $4 million to Klamath County, where more than half of the land is owned by the federal government. That money funded the entirety of the sheriff’s department budget, DeGroot said.

But Congress needs to regularly re-authorize the program, and lawmakers have not renewed Secure Rural Schools funding since 2023, leaving more than a dozen Oregon counties flailing with significant budget holes.

Without the program, counties have defaulted back to federal timber revenues, which are just a fraction of what counties have been used to. This year, they’ll be planning budgets around that shortfall.

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Klamath County expects just $400,000 from timber receipts, DeGroot said — one-tenth of what it received through Secure Rural Schools.

Klamath County’s federally owned forests, rivers and lakes — including Oregon’s iconic Crater Lake — are beloved by hunters, hikers, campers and fishermen. But providing services to areas around federal lands, like sheriff’s patrols and road repairs after logging operations, comes at a cost.

“We still love our access to public lands. That’s why we live in Oregon, right?” DeGroot said. “But now hosting them as a county government is a liability and no longer an asset.”

The cost of a One Big Beautiful Bill

The small timber payments that counties are now relying on may disappear, too.

This year’s budget reconciliation bill, what President Donald Trump calls the One Big Beautiful Bill, requires federal agencies to ramp up logging. But it also includes a provision requiring “all monies” from those new timber sales go into federal coffers. That could mean nothing from new logging contracts will be shared with the counties that house those forests.

That’s money that counties would otherwise use to pay for essential services, like road repairs and law enforcement.

“It’s real basic stuff for safety and people’s quality of life,” said Mindy Crandall, Oregon State University forest policy professor. “It’s shocking to me, quite frankly, that they’re proposing keeping all that revenue.”

Even though timber receipts will bring in much less than what counties had been getting through Secure Rural Schools, these funds are still crucial to rural areas that are operating on shoestring budgets.

“Those are the receipts that allow us to tread water,” said Trost, the Curry County commissioner. “The removal of those means we are sinking.”

Trost believes the provision in the One Big Beautiful Bill was an oversight, and is holding out hope that Republicans in Congress will restore timber receipts within a year.

“Most of our counties, and especially our timber-dependent counties, are lobbying very hard right now in getting this course corrected,” Trost said. “I trust that we’ll be successful.”

Some lawmakers tried to protect county timber revenue as Congress moved to increase logging on federal lands, including U.S. Sen. Ron Wyden, an Oregon Democrat, who introduced an amendment that would have continued revenue sharing. Wyden’s amendment didn’t make it into the final bill.

“This has caused considerable angst among counties,” Wyden wrote in letters to the Forest Service and BLM last week.

Wyden called on the agencies to declare that they will continue revenue sharing with counties by September. “Courts have decided that Congress needs to be explicit when it intends to repeal a law,” he wrote, adding the budget bill cannot repeal the law that requires a share of timber receipts to go to counties — despite its directive to pay that revenue entirely to the federal treasury.

On Friday, a spokesperson with the U.S. Forest Service said the agency is still working to determine how the One Big Beautiful Bill will affect county payments. The Bureau of Land Management didn’t respond to multiple requests for comment.

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U.S. Rep. Cliff Bentz, an Oregon Republican who represents many timber counties, said removing timber revenue sharing was a compromise. Bentz voted in favor of the One Big Beautiful Bill and hopes it will bring jobs back to a region where many sawmills have been shuttered.

The Republican-backed budget bill passed by an extraordinarily tight margin. It only avoided a filibuster from Democrats by meeting procedural rules. Bentz said sending money to counties instead of the federal government could have broken those rules.

“That would have caused the Senate parliamentarian to have thrown the entire provision out,” Bentz said. “Getting jobs for people, trying to save our mills and getting wood fuel out of the forest was certainly worthwhile, and we’ll have to address the tax issue in some other fashion.”

About seven mills closed in Oregon last year. While timber executives blame a lack of supply — they say there just aren’t enough trees being cut — lumber mills close for a variety of reasons, including market conditions, increased production costs and automation.

Due to advances in milling automation, it’s not clear if cutting down more trees in federal forests would increase milling jobs.

Federal timber harvests have been on the rise since 2002, after cratering in the ’90s. Yet despite that increased logging, employment in the timber industry has been mostly flat since 2010, according to U.S. Forest Service data.

As for Secure Rural Schools, Bentz said his office is working on renewing the funding.

“We are, at this point, working to include it in another bill, and we think we have support for it,” Bentz said. “We think it’s going to happen.”

How we got here

The timber revenue sharing funding mechanism that Oregon counties still rely on goes back to the early 1900s, during the Roosevelt administration.

After eastern states became heavily industrialized, Roosevelt saw a value in protecting vast stretches of nature from development. Not just for recreation — Roosevelt was an avid hunter — but for water quality and natural resources, like timber.

So, he championed the creation of national forests and parks. But blocking these areas from development meant burgeoning communities across the West couldn’t collect taxes on large chunks of land within their boundaries.

“Those lands are not generating revenue in a traditional sense for counties,” said Crandall, the OSU forest policy professor. “So the way the federal government has dealt with that is by doing revenue sharing.”

The Roosevelt administration made a promise to counties: The country would preserve hundreds of millions of acres of public lands for recreation and resource extraction, like mining and logging. Whatever proceeds the government collects from logging those lands, a quarter of it would go to counties.

Those local governments have built their budgets around that income ever since.

Timber revenues reduced to a trickle in the 1990s, after a national outcry against clearcutting ushered in new environmental regulations. At the same time, globalization spurred many timber companies to shift wood production overseas.

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The federal government came up with Secure Rural Schools in the early 2000s to help fill funding gaps for schools and county budgets. But the program wasn’t meant to last indefinitely, according to Mark Haggerty, senior fellow at the Center for American Progress, a liberal-leaning think tank.

“They were always intended to be transitional payments that declined year over year,” Haggerty said. “The idea was that counties would eventually diversify and find other ways to generate revenue to pay for local services, and so those appropriations wouldn’t be needed forever.”

Oregon counties struggled to identify those other revenue sources. In the 1990s, Oregon voters also passed strict limits on how much local governments can raise taxes. Any substantial tax increases need to be approved by local voters.

Many of Oregon’s timber counties have opted to keep their tax rates among the lowest in the state.

Now without Secure Rural Schools, timber receipts or property tax increases, those same counties are being left to choose between which essential services to keep, and which to let go.

News Source : https://www.opb.org/article/2025/08/18/oregon-timber-counties-fail-congress-funding/