Congress leaves county funding in jeopardy.

Byline: Diane Dietz The Register-Guard

As a by-product of the tax cut bill, Congress ended the latest and best hope for ensuring continued federal payments to Lane County for roads and schools.

The bill's authors co-opted a money-raising mechanism that Sen. Max Baucus, D-Mont., and Sen. Ron Wyden, D-Ore., had hoped to dedicate to replenishing the Secure Rural Schools fund for seven additional years.

Wyden said Republicans grabbed the mechanism to give tax relief to the "wealthy few" at the expense of schoolchildren in rural counties across the nation.

Lane and Douglas counties stand to lose $50 million each annually if the Oregon delegation doesn't invent another way to replenish the fund.

"Apparently, the congressional leadership agrees we had a good funding idea," Wyden said in a news release Thursday. "They liked it so much they used it for their own priorities."

The House Ways and Means Committee and the House Republican caucus staff on Thursday declined to answer questions from The Register-Guard.

Wyden was surprised and "extremely frustrated" that Congress commandeered the money-raising mechanism, Josh Kardon, his chief of staff, said.

Undersecretary of Agriculture Mark Rey had challenged lawmakers to come up with a proposal for raising county payment money, if they didn't like the administration's plan, which involved selling 175,000 acres in federal forest land. The forest-sale idea proved unpopular with both Republicans and Democrats in Congress.

The Bush plan would provide 40 percent less money than the counties receive now.

Lane County officials view the annual payment as a century-old pact between the federal government and the county.

Uncle Sam owns 57 percent of Lane County's land base, so less than half is available for development and for being taxed. With that much land locked up and untaxable, it's only fair the county should get federal compensation, they say.

To raise money to keep the federal payments coming, Baucus and Wyden in March proposed that the federal government withhold federal income taxes upfront when the U.S. government pays companies that it contracts with for products or services.

That would raise billions of dollars over a decade because a large share of the contractors fall in arrears on their federal income taxes. The plan was first proposed last year by the Joint Committee on Taxation as a primary way to improve compliance with tax laws. It would have raised enough to replenish the county payments fund.

But since Congress is now using the mechanism to fund the capital gains tax cut, there's no other plan on the horizon to fully fund the county payments plan, said Tony Bieda, Lane County's intergovernmental relations manager.

That's unless lawmakers pay for the county program with deficit spending, something that's tricky in an election year. "It's always a possibility," Bieda said. "They do exercise that option on a regular basis."