Commissioner Morgan's Budget Notes

THE COUNTY SCENE 
The Budget Box Encore

As you know, safety net funding is a direct feed from the federal government’s general fund.  It compensates Douglas County for the 52% of our land base that is owned by the federal government and does not pay property taxes.  It supplanted a previous formula that shared a portion of the revenue that was generated by the sale of commodities (mainly timber) with the counties and schools.

This original formula became inoperative when timber harvesting ended as the spotted owl, the Endangered Species Act, and litigation brought the harvesting program to a halt.  The Safety Net has been reauthorized a number of times.  The current reauthorization was for four years.  The first three years called for a 10% reduction each year, the fourth year calls for a 33% reduction.

Public hearings are scheduled for May 9 & 10 for the fourth year, fiscal year (FY) 11-12, that begins on July 1, 2011, calling for a 33% reduction to safety net funding going to General Fund. 

The County’s General Fund is in peril.  It’s used to fund important services that don’t have a dedicated funding base, or the dedicated funding is too small:  the Sheriff’s Office, District Attorney, parks and facilities, juvenile services, libraries, tax assessment and collection, and the landfill are the main users.

Safety net is the main source of general use funds.  Property tax is another funding source.  In the current budget (FY 10-11) we anticipate collecting about $8 million in property taxes.  All of it goes to the Sheriff’s budget, and it funds about half of that budget.  In FY 10-11, we will also receive $18 million of general fund safety net.  Total GF is $26m.

In the proposed budget for FY 11-12, we anticipate again receiving around $8m in property taxes.  However, safety net will be cut 33%, so we will go from $18m to $12 million, a $6m cut.  So, Safety Net plus property taxes will drop from $26m to $20m.

This time next year, we will be adopting budgets for FY 12-13.  Property taxes will again be in the $8m range.  Unless we are rescued by Congress, safety net will be replaced by the original funding formula based on actual timber harvest and we will get around $3.5m.  So, Safety Net plus property taxes will again drop from $20m to $11.5m.

The real issue is what property tax and safety net funded programs will look like if they are funded only with existing property tax and actual timber harvest.  As we seek the path to reduce spending by $14.5m, everything needs to be on the table.  Including the landfill, a program that uses $2.9 million of safety net funds this year, and the library that uses $1.8 million safety net.

Please share your thoughts and ideas with us as we chart this path.  We need and welcome your assistance. 

Susan always welcomes your questions or comments.  Please contact her by email at morgan@co.douglas.or.us; by mail at Douglas County Courthouse, Room 217, 1036 SE Douglas, Roseburg, 97470; or by phone at 440-4201.