SALEM, Ore. — Rural counties across Oregon are confronting a deepening fiscal crisis as federal funding sources that once propped up local budgets dwindle. The decline threatens essential services such as law enforcement, schools, and road maintenance in communities heavily reliant on federal timber payments.
Dependence on Timber Revenues
For decades, counties with large swaths of federally owned forest land depended on a share of timber revenues from federal logging to offset the property tax revenues they could not collect. These funds provided critical support for schools, sheriff’s departments, and other public services.
But logging on federal lands slowed dramatically in the 1990s after environmental protections, including the Endangered Species Act, restricted harvests. As timber sales fell, so too did the payments to counties.
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Temporary Relief Runs Out
Congress responded in 2000 by creating the Secure Rural Schools (SRS) Program, a temporary funding mechanism that helped stabilize county budgets. Over the next two decades, lawmakers repeatedly reauthorized the program — until 2023, when it expired.
With SRS gone, counties reverted to receiving a much smaller share of actual timber revenues, leaving gaping holes in local budgets.
New Federal Law Shifts Revenues
Compounding the challenge, President Donald Trump signed the One Big Beautiful Bill Act in July. The measure requires federal agencies to ramp up logging but includes a provision redirecting all proceeds from timber sales to the federal government instead of counties.
For rural governments, this threatens to eliminate one of the last remaining financial lifelines. Even with more timber being cut, counties may not see a single dollar from increased harvests.
Local Leaders Sound the Alarm
County officials warn that the consequences will be severe. Lane County Commissioner Heather Buch said her county, which receives the second-highest federal payments in Oregon after Douglas County, is already bracing for cuts. “We’re staring down the possibility of having to scale back core services that residents depend on,” she said.
Klamath County Commissioner Derrick DeGroot, whose county receives the third-highest payments, echoed the concern. “The system is broken,” he said. “We can’t plan long-term when our funding swings wildly depending on federal decisions. Our deputies, our schools, our roads — they all suffer when this money disappears.”
Searching for Stability
Policy experts argue that Oregon’s rural counties need a more stable model for funding. Mark Haggerty, a senior fellow at the Center for American Progress, said the current cycle of temporary fixes and sudden lapses is unsustainable.
“These counties have been caught in a boom-and-bust pattern tied to federal policy for decades,” Haggerty said. “What’s needed is a predictable, long-term solution that doesn’t rely on either high levels of logging or short-term congressional fixes.”
Ideas under discussion include permanent revenue-sharing agreements, state-level support to replace lost federal dollars, or new mechanisms that tie county funding to natural resource stewardship and rural development.
The Road Ahead
For now, Oregon’s rural counties face tough choices as they prepare budgets for the coming year. Without congressional action or a new state framework, commissioners warn, residents could see cuts to classrooms, longer emergency response times, and deteriorating infrastructure.
As Buch put it, “We can’t keep lurching from crisis to crisis. Rural counties need a path to stability, or we risk losing the very services that hold these communities together.”
