County's income tax stuck in limbo.

Byline: Matt Cooper The Register-Guard

The Lane County commissioners were at odds Friday over whether to repeal their recently enacted income tax or refer it to the voters, a day after getting word that the federal government might come through with crucial timber payments.

Congress is deeply divided over the Iraq war spending bill that includes a one-year extension of payments to timber counties. That bill's uncertain prospects and other questions have split a county board that must cut 250 jobs by July 1 if it doesn't get the federal aid or have a local tax ready to replace it.

Oregon's federal lawmakers on Thursday said they were very optimistic about getting Congress to approve the payments. That prompted Commissioner Faye Stewart, board chairman, to announce plans to begin the repeal of the county income tax that he enacted two weeks ago with Commissioners Bill Dwyer and Bobby Green.

But there's no consensus on what the board will do next.

Stewart said Friday that the board could begin the process to repeal the tax as soon as Wednesday. But he cautioned that he's not in favor of eliminating the tax until the federal government has formally approved the county aid, a position also taken by Green.

Commissioner Peter Sorenson, meanwhile, wants to repeal the tax even if Congress doesn't provide the aid.

And Commissioners Bill Dwyer and Bill Fleenor favor a different path entirely. They lean toward putting the income tax before voters in May.

Fleenor said he wants to respond quickly to the will of the people, noting that today's citizen-led petition drive against the tax is likely to succeed in putting the tax up for a vote of the people in the fall.

Dwyer said he wants to give voters a chance to decide whether to keep part of the tax, even if the federal money is approved.

Even with the federal money, personnel and other county government costs consistently outpace revenue, and that will force cuts of up to $5 million in the coming fiscal year alone, officials said.

Part of the tax was meant to cover that shortfall, Dwyer said, and voters should decide whether to keep it or allow county services such as public safety and public health to be cut again.

"Repealing (the tax) doesn't really get to the bottom of our problem," Dwyer said. `(Referring the tax to the ballot) puts the onus back on the people - if they want to dismantle the government, then they'll be the ones that will do it.'

Stewart, Dwyer and Green enacted the county's first-ever income tax in February in expectation of a possible end to the federal Secure Rural Schools and Communities Self-Determination Act of 2000.

Until its expiration last year, the aid program had compensated Lane and 700 counties nationwide that have federal timberland that the counties can't tax and that can't be developed into a tax base. Lane County government and schools received about $47 million a year under the program.

Oregon's federal lawmakers have written a one-year extension of the program into a war-spending bill that President Bush wants approved by mid-April. But the bill's fate is uncertain because Bush opposes Democratic leaders in the House who want the bill to include troop withdrawal from Iraq in 2008.

Democrats also are being criticized for inserting into the war-spending package billions of dollars for domestic programs ranging from the timber payments to programs for farms, flu preparedness, New Orleans levees and home heating.

Critics say the Democrats are being opportunistic, using a must-pass measure for funding U.S. troops in Iraq and Afghanistan to carry items that can't advance as easily on their own.

House Speaker Nancy Pelosi, D-Calif., leads the effort for the bill, but her party is divided. The White House has threatened a veto, and the Republican minority in the House may close ranks against the bill.

If the timber payments haven't been renewed by mid-April, the county would plan the coming fiscal year without that money and would face laying off about 250 workers to meet the deadline for submitting a balanced budget to the state by July 1, Stewart said.

It's a worst-case scenario, and Stewart and Green would avoid it by keeping the tax alive until the outcome of the federal money has been decided.

Sorenson, however, said it would be better to cut personnel, noting that the enactment of the tax has sparked a level of anger he had not seen in 20 years as an elected official.

"We need to try to repair the damage that has been done, by going out and listening to the voters and listening to the people and doing the best we can with the resources we've been given," Sorenson said.

The picture will be further clouded if petitioners succeed today in referring the tax to the ballot, said Annette Newingham, county elections official.

In that event, a vote on the tax could take place no sooner than September, she said. But what the commissioners do with the tax between now and then might make the need for a vote moot, she said.

The Associated Press contributed to this report.