Funding tax force weighs all options

Business and community leaders charged with developing a blueprint to bridge the county's $23 million shortfall created by the absence of federal timber subsidies hope to present their plan within six weeks.

Created by the Jackson County Board of Commissioners, the 13-member citizen panel's much-anticipated suggestions will likely contain a combination of spending cuts and new taxes, those close to the discussions say.

"There aren't any magic bullets in the whole thing," said former Ashland Mayor Alan DeBoer, vice-chairman of the Task Force on Jackson County Services, which was expected to submit its report by July.

DeBoer, owner of Town and Country Chevrolet in Ashland, said in an interview Sunday that part of the solution, he believes, should be increased logging on millions of acres of former Oregon and California Railroad lands, which the federal government controls.

While selling the forestlands is not the answer, he said transferring the lands to the state and logging a "sustainable yield," would be a boon to the cash-strapped county, which closed its main library and its 15 branches in the absence of the timber payments.

"It's a crop that we raise that's very valuable," said DeBoer, who added as mayor he oversaw 500,000 board feet logged from the Ashland Watershed "with no protest."

Calling them "cultural centers for cities," DeBoer said he agrees with County Commissioner C.W. Smith that at least four "key" library branches need to be opened immediately.

The local funding crisis, brought on by Congress' failure to reauthorize the $425 million a year Secure Rural Schools and Community Self-Determination Act that expired last year, has affected every corner of Jackson County government, not just the libraries.

In 2000, Congress began making payments to 700 counties in 39 states after federal logging restrictions approved in 1994 led to diminished harvests. The money has also been used locally to finance such things as road construction and public safety programs.

Congress is expected to vote on extending the timber subsidies in September. Under one proposal, affected Oregon counties would receive another full year of federal payments then see a 10 percent yearly decrease for five years before funding is terminated.

Task Force Member Shayne Maxwell of Gold Hill said the county's looming budget crisis is "not as simple" to solve as many people think it is.

"There's a misperception that there are secret pots of money out there," said Maxwell, a member of the task force's subcommittee on public safety.

She said in addition to continued library closures, other county-provided services are in jeopardy, including vector and weed abatement, animal control and snow removal.

"The list goes on and on," she said. "When people don't have it is when they'll really miss it."

Maxwell, like DeBoer, said there is no easy fix, but disagrees that an increase in logging ought to be part of the solution.

"I don't like going backwards," she said, arguing that increased logging would not create "a healthy future" for the county.

One integral part of the funding solution, Maxwell said, is for the county to diversify its revenue stream, which she said is overly dependent upon residential property taxes.

"People feel that everything is on the backs of property owners, and it is," Maxwell said. "Maybe we can revisit a (countywide) sales tax that will fly."

Maxwell also suggested that a real estate transfer tax would be a viable revenue stream for the county, which saw $2 billion in real estate change hands in 2006.

However, the state Legislature, caving to the powerful real estate lobby, has barred local governments from collecting such fees, said Maxwell, an associate broker at Gary Martin Realty in Grants Pass.

"When we find a solution we think will have legs, they tell us the Legislature has outlawed it," she said, pointing to the real estate transfer fee and a proposal to charge for some county library services, including interlibrary loan.

Ashland City Councilor David Chapman said the county funding crisis cannot help but affect city residents negatively, with the library closures being the most obvious consequence of the county's financial woes.

Chapman, a member of the Citizens' Budget Commission, said he is confident that Ashland voters will approve Measure 15-79 on the Sept. 18 ballot to provide two years of interim library funding by collecting a tax of 58 cents per $1,000 in assessed property value.

"We're going to have some level of service, but it's not going to be what we want it to be," he warned in a telephone interview Sunday.

Pointing to recent labor agreements with the city's police and fire unions that will cost the city an estimated five percent more each year because of increasing insurance costs, Chapman said the city's expenditures are outpacing revenues since state law caps property tax rates at three percent annually.

"Something's going to have to give at one point," Chapman said, noting that Ashlanders inevitably will be asked soon what services they want to keep and what they are willing to pay for to keep.

County Commissioner Dave Gilmour, eager to see the task force's final recommendations, said he is hopeful that the panel will propose "something substantial that will increase revenues" for the county.

"Property taxes alone cannot be the answer," Gilmour said. "We need to look at the whole package."

Gilmour said he could support a county sales tax so long as it were not a "stand alone tax" and it lowered residents' overall tax burden.

"People would have to end up ahead," he said.

One such proposal mulled quietly is a countywide, 3.8 percent sales tax that would generate an estimated $51 million, according to preliminary calculations.

In exchange for paying a sales tax that would levy Californians who cross the border to shop, tourists and the underground economy, residential property owners would get most of the $2.10 per $1,000 assessed value that they currently pay the county in property taxes rebated back to them.

Exempt from the tax would likely be necessities, including food and medicines, as well as business-to-business transactions, Gilmour said.

"If only individuals are paying the sales tax, do we really want to give the Wal-Marts of the world a big tax break?" he asked rhetorically.

Additionally, Gilmour said, sales tax revenues could go to pay off the county's general obligation bonds voters approved for the library and the Juvenile Justice Center.

As for increased logging, he said there would be no guarantees that a larger cut would create much-needed local jobs, especially if logs were loaded up and shipped overseas for processing.

"We are going to look at everything &

as a package," Gilmour said, adding that he will have a better idea of the situation once all of the options are on the table for discussion.

covers government for the Ashland Daily Tidings. You can reach him at

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