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County faces budget shortfall By PETER WONG Jackson County government faces a gap of between $1.2 million and $1.8 million in its 2000-01 budget, requiring officials to cut services or find savings. Though the problem is not nearly as serious as it was a decade ago, a public member of the Jackson County Budget Committee said Monday it will persist. "Until the O&C question is resolved, this problem is not going to go away," said Neil Thorson of Medford, an Avista Utilities executive. Budget shortfalls are nothing new in Oregon counties that depended heavily on so-called O&C money, revenue from timber cut on federal land that once belonged to the Oregon and California Railroad. Property taxes have surpassed federal O&C payments as the largest source of income for the county general fund, but the discretion of the three commissioners and three public members of the budget committee have over either is limited. Property taxes for county operations can grow only about 3 percent annually, and federal payments for O&C lands will continue to drop 3 percent annually until a 10-year guarantee ends in 2004. Federal legislation to stabilize payments to counties has cleared the U.S. House, but the Senate has not acted on it, and supporters have yet to work out how it will fit under federal budget caps. A proposed 2000-01 budget will go to the committee April 18. Public hearings are scheduled April 25, 27 and 28. Thorson said public safety is his top priority, but even high-priority programs must do some belt-tightening. "There are some basic functions of county government we cannot quit funding," said Commissioner Sue Kupillas. "You cannot deny the county clerk the equipment to run an election." Acting County Administrator Susan Slack said one reason for the projected gap is the expiration of a five-year property tax levy that voters approved in 1994 for criminal justice, including staffing for jailing, prosecuting and supervising offenders. The levy produced $3.8 million annually, but the county spent less of it in its first year (under $2 million) and more in its final year this year ($5.8 million). Under revisions of Oregon's property tax system that voters approved in 1996 and 1997, the county is guaranteed a tax rate that produces only $3.8 million annually. "It is short of meeting costs to operate the criminal justice system at the same level of service currently provided," Slack said. Other problems Slack noted: A loss of reimbursement (about $600,000) for Josephine County's state prisoners who filled 25 beds at the jail in Talent. Those beds can be filled with local inmates who otherwise would be released from the crowded jail in Medford, but they do not qualify for reimbursement. "We owe it to the people of Jackson County to fill every bed we have," Commissioner Jack Walker said. Higher costs (about $376,000) from a projected labor settlement with the Jackson County Sheriff's Employees Association, which represents most deputies. The dispute is in arbitration. A commitment ($2 million) to a projected reserve fund of $10 million, which would help carry county government through 2004-05 if Congress fails to resolve the issue of federal payments. The fund now has $3 million. What to do about county support (about $1.7 million) for the Southern Oregon Historical Society and other societies. They relied on a special-purpose levy that voters approved in 1948 to restore and maintain buildings in the old county seat of Jacksonville. But the levy was folded into the county's general taxing authority when the state revamped property taxes in 1997. Mail Tribune Copyright � The Mail Tribune 2000, Medford, Oregon USA