WASHINGTON, D.C. – Oregon’s elected leaders breathed a sigh of relief with last Friday’s passage of the financial bailout bill in the House of Representatives. They said the bill is not perfect, but offers a step toward firmer financial footing for the nation.

The Emergency Economic Stabilization Act of 2008, signed last Friday by the president, also offers a lifeline for some rural residents as it includes a restoration of the county payments act.

“For rural Oregonians, we finally succeeded in reauthorizing and funding our county timber payments program for the next four years, and we fully fund Payment in Lieu of Taxes through 2012,” said U.S. Rep. Greg Walden (R-Ore.). “This is an enormous victory for our Oregon schools, counties, libraries, road departments and law enforcement agencies. Counties and schools can now restore essential services and real, family-wage jobs.”

U.S. Sen. Ron Wyden (D-Ore.) said “Oregon communities across the state can finally breathe a sigh of relief, and I want to thank the bipartisan cooperation of so many who made this possible.”

He and Walden both noted their repeated efforts over the past year to get the county payments restored.

“I promised I would attach my legislation to every bill moving in Congress until the job got done, and that’s what I did,” Wyden said. Wyden voted against the bailout bill in the Senate, describing the measure as too much, too fast, although he lauded the House action with its salvage of county payments.

The Secure Rural Schools and Community Self Determination Act of 2000, originally authored by Wyden and U.S. Senator Larry Craig (R-Idaho) in 1999, established a six-year payment formula for counties that receive revenue-sharing payments from the United States Forest Service (USFS) and Bureau of Land Management (BLM) lands. Based on historical timber receipts, the formula established a stable source of revenue to be used for education, roads and various other county services in rural areas. Over 700 counties in 39 states have received funding under the original county payments law, which was allowed to expire in September 2006.

The PILT program compensates states for loss of tax revenue from federal lands. Full funding of PILT would also provide increased funding for some counties in Oregon and around the country that lose tax revenues due to the presence of federal lands in the state.

State Sen. Ted Ferrioli (R-John Day) called the restoration “long overdue, but welcomed with great relief.”

“County payments are part of a promise made to rural communities in exchange for shutting them out of their forests,” he said. “These communities represent the backbone of Oregon and deserve to have the promises made to them kept.

Ferrioli added that the the long-term solution is not government assistance, “but giving timber-dependent communities access to stable, family wage jobs that will free them from dependence on political games in Washington, D.C.”

Grant County Judge Mark Webb said the extension should give the county more financial security and latitude in budgeting. He said it was frustrating to see it come on “the coattails” of a bailout that essentially rewards irresponsible behavior and decisions, however.

He said the county has been told to expect the first payment from the new funding in January 2009. The new program is expected to provide 90 percent of the 2006-07 funding in the first year, and then ramp down to a lower level of funding each year.

Grant County’s share goes to the county’s road reserve fund, and the goal is to use the interest accrued on that money to fund road department operations, lending long-term stability to the budget.

Webb said the Oregon Congressional delegation has cautioned the counties not to expect a renewal of county payments after the four years. That’s the reality, he said, even though he believes the federal government has an obligation to the rural timber counties.

U.S. Sen. Gordon Smith (R-Ore.) also applauded the inclusion of the four-year, $3.3 billion county payments extension.

“I commend my colleagues in the House for breaking through partisan gridlock to restore vital economic lifeline to Oregon’s counties,” said Smith. “In a time of economic turmoil, this critical funding will ensure that thousands of Oregonians jobs will be safe and schools and libraries will remain open. Today’s vote represents an enormous victory for rural communities across the country.”

Gov. Ted Kulongoski also called it “welcome news.”

He said a task force he created to look into solutions to the counties’ woes was still pushing ahead with its work.

“It is essential that we use the time we have been given to work together to implement a plan that allows our counties to continue to provide critical services in their communities,” Kulongoski said.

Overall, the bailout measure was hailed as a big improvement over the original proposal from the Bush administration.