JOSEPHINE COUNTY, OREGON: SAD FAILURE OF CENTRAL PLANNING
By Attorney Jack
Swift, JD
June 25, 2013
NewsWithViews.com
Josephine County, Oregon. —Josephine County, recently made the national news with the disclosure of a 911 call last year wherein the dispatcher told a helpless victim of a sexual assault that there was no sheriff's deputy to be send to her aid. Just as our people in Benghazi cried for assistance and were denied, the hapless victim in Oregon was told that a report would be made tomorrow. As with the Benghazi disgrace, one has to wonder how such a failure can come to pass. Unlike Benghazi, for Josephine County there is a clear explanation. It is not a story of short sighted and foolish penny pinchers who will not pay for government. It is a story of the failure of central management.
The Federal Plan
Josephine County and many other counties in western Oregon came into existence as a product of Congressional planning. Following on the heels of the western gold rushes, Oregon was admitted to the Union on the eve of the Civil War. Apart from the developments in the Willamette Valley and some scattered gold camps, there was little there. The land was frontier and ownership of the whole northwest territory was an issue of dispute with Great Britain.
The Civil War changed the whole concept of military strategies and Congress recognized the need for railroads as a means of rapid deployment. Besides providing a means of ready transportation for the developing frontier, a railroad connecting Sacramento and Portland was seen as critical in view of the ongoing disputes with Britain. Following the familiar pattern, a railroad grant was established for the Oregon and California Railroad. Each state would incorporate a company to build the railroad in that state. For each mile of track created, the company would receive vast parcels of public land which could then be sold to raise capital to pay for building the next section. Besides providing a means of financing the construction of the railroad, a corollary effect was that the grant lands in private ownership would serve as a tax base for the local communities and governments Congress wanted to see develop in the area.
The railroad and the grants would serve to open the frontier to development.
One glitch developed in the Oregon portion of the plan which could not have been foreseen in Washington. The land between the Willamette Valley and the California border, apart from the river bottom lands, is extremely mountainous and characterized by steep gradients suitable only for the growth of timber forests. At the time, there was no market for commercial timber and the railroad was unable to sell its granted lands. It went bankrupt. After a time, another company took over the effort and the railroad was completed. In the flatlands, communities were laid out and sold. Counties came into being and the plan worked.
Unfortunately, about that time, California was experiencing a development boom and there arose a substantial market for timber. The railroad grant timber lands became suddenly very valuable. This led to a second glitch in the Congressional plan. The railroad started selling the lands for a handsome, unforeseen profit - which was in violation of a peculiar term in the original land grants. Teddy Roosevelt was outraged and he led Congress to reclaim the granted lands. After years of litigation and three trips to the Supreme Court, Congress repurchased the lands from the railroad, taking them out of private ownership and making them immune to taxation. In a frenzy of pique at the new company’s unforeseen profit, Congress yanked the financial base of these new counties out from under them.
In Josephine County, Oregon the removal is significant. The county consists of approximately one million, fifty acres. Of that, more than 700,000 acres (or 70%) is government owned. There are a national monument, two wilderness areas, a wild and scenic river, two national forests and the Oregon and California Railroad lands. There are only two towns that even call themselves cities. Altogether, there is less than 85,000 population.
Recognizing the harm it had done, Congress initially subsidized the O&C counties with payments made “in lieu of taxes.” This sustained the counties but with time became an onerous obligation on Congress. Finally, in 1937 a happy solution was found.
In the 1930s a policy dispute had arisen between the Department of Agriculture which administers national forests through the Forest Service and the Department of the Interior which manages other federal lands through the Bureau of Land Management. The traditional Forest Service policy was to clear and eradicate forests in the interest of converting their lands to arable acreage suitable to development and farm production. They were quite successful and, nationally, forests were disappearing rapidly. In the BLM a conservation movement had arisen and they were urging management of forest lands on a sustained yield basis which would both preserve the forest resource and provide for production of timber. In 1937 Congress passed the Oregon and California Railroad Lands Act and assigned the management of the re-vested railroad lands to the BLM for permanent timber production according to the principle of sustained yield.
This act served credible conservation ideals and solved the counties’ support problems too. A provision of the act was that the revenues generated from timber production would be shared on a 50-50 basis with the respective counties. This plan worked so well that by the 1980s the federal government had recovered all the money it had spent in litigation and repurchasing the grant lands and in making subsidy payments along the way. In Josephine County, for 11 years the county had to impose no property taxes on anybody. At the same time, they were able to develop juvenile law programs that were recognized statewide as models in the field. Twenty-five years ago, superlative law enforcement was not a problem in Josephine County, Oregon.
Failure of the Federal Plan
In the late 1980s a great dispute arose in northern California between the timber interests and the new environmentalists. The controversy dealt with the oldest living redwoods which were about to be logged. The fight was all about “old growth” and the environmentalists managed to prevail. Having found the right spin and the right buzz words to sway the public, the environmentalists took the fight to the entire northwest with the single objective of halting timber production.
Also in the late 1980s the northern spotted owl was added to the list of endangered species. Its nomination was curious. The Dept of Fish and Wildlife acknowledged that no one knew how many spotted owls existed historically and they acknowledged that no one knew how many spotted owls existed at the time of listing. It was reasoned, rather fallaciously, that because spotted owls will nest in old growth forests, a reduction in the total amount of old growth had to threaten their existence. Logging of old growth forests had to threaten spotted owls. The fact that spotted owls with the same dna nested in oak trees - the California spotted owl, or in cactus in the desert - the Sonoran spotted owl, did not deter them. They simply defined the northern spotted owl as a separate species when the particular owl is found in a forest.
The
listing of the northern spotted owl as a distinct and threatened species
was fortuitous for the environmentalists. That triggered a requirement
under the Federal Endangered Species Act for federal agencies to contribute
habitat from lands not otherwise dedicated by Congress. The Northwest
Forest Management Plan was adopted with a goal of preserving the northern
spotted
owl. Timber production under that plan was cut to 10% of the historic
goals. And genuine “old growth” - defined as stands 200 years
or greater in age - was forbidden. In one document, the fifty year success
of the 1937 act was undone and Josephine County in particular was once
again pointed toward the disaster initiated by Teddy Roosevelt eighty
years earlier. Notably, since its
adoption, timber production under the Northwest Forest Management Plan
has not achieved even 10% of its ridiculously low goal. Timber revenues
for the O&C counties have all but disappeared.
Thus we see that even when government planning is effective, it is vulnerable to alternative planning from other departments. The pattern is familiar. The net result is always the same. Ultimately the “planned” activity cannot happen.
So, as in Teddy Roosevelt’s day, the problem arises of how to support the foundling counties.
The quick answer was the same, federal subsidies. Since adoption of the owl rescue management plan, Congress has provided annual subsidies to 18 counties in western Oregon.
Then, as now, Congress rather predictably tired of that arrangement. But Congress has no alternative plan. The crisis provoked for Josephine County is simply the notification that Congress will not support it any more.
The scant taxpayers in Josephine County, asked to step forward and pay more taxes, have refused. The reason is rather simple. No one wants to step up and pay someone else’s bill. The O&C lands are lands specifically set aside by Congress and dedicated to a specific purpose.
They
are subject to a unique mandate in the 1937 Act requiring that the sustained
yield capacity of timber production must be sold every year. That production
and that mandated sale is not happening and that is why there is a revenue
crisis. If Congress prefers to compensate the County for the government’s
failure to abide by the law, well and good. But the government is
not entitled to ignore the law and send the bill to the taxpayers of the
county. The situation is akin to being made an unwilling co-signor on
someone else’s debt.
The question will arise, “Why doesn’t Josephine County develop a source of revenue alternative to timber production?”
That is where State central planning got involved.
State Central Planning
Contrary
to the national impression created by news of the local fiscal crisis,
Josephine County, Oregon is a great place to live. It has scenic mountains.
It has a wild and scenic river. The legacy of mining and logging roads
provide easy access to all the desirable outdoor activities. It is a lovely
place to live, so long as one is not burdened with the need to earn a
living. As a consequence, it became a great place to retire. Residential
parcels away from the stress and
congestion of the suburbs sold quite well. The County had an excellent
resource in undeveloped real estate. Development of that resource sold
well and the development increased the property tax base proportionately.
The local economy adjusted to the peculiar needs and services required
by the elder generation and industries specializing in those services
are doing well today. Then, unfortunately, the State determined that the
County needed planning by the State.
In the
1980s, not to be outdone by California’s ardor to preserve the old
growth (Oregon has always suffered a extreme case of sibling rivalry with
California), the State showed its concern for farms and forests by enacting
statewide comprehensive land use regulation. The stated objective of that
planning was the preservation of the forests and farmlands in the state.
Or,
phrased another way, the scheme was to stop growth in rural counties.
The State assigned quotas of land to be designated for farm or forest
utilization only without allowance for residential development. In recognition
of the burden of potential lost profit imposed upon land owners, the plan
also called for reduced taxation on lands so limited in utilization. In
Josephine County, the
effect on the tax base, and the opportunity to expand it, has been devastating.
As a
typical example, forest land zoned for timber production which might have
a commercial market value of $165,000 is taxed at a $9200 property value,
thanks to credits. The irony is that the same tract utilized in residential
development could produce a tax base of $4 to $5 million. A farm that
can only produce for local consumption owing to costs of transportation
sits in the
same situation. The same planning that prohibits the development of land
to its highest and best economic use prevents even the tax realization
of its current value.
Keep
in mind, also, that Josephine County, for all its 1 million acres, has
very little taxable land. That is an issue of Federal planning. Of that
little remaining, common sense demands that it be exploited to its maximum
value. But State planning has put the vast majority of that private land
into economic sequestration. Quite literally, Josephine County has no
way to go. Thanks to
central planning.
Confronted
with their planning induced failures, the government types respond as
they always do. They blame the failure on insufficient taxation on those
poor folks lucky/unlucky enough to have snuck in before they could shut
the door on development. However, under Oregon’s constitution the
County cannot increase the tax rate without the consent of the voters
and each
time the government planners send a tax proposal to the voters, the few
voters there are, say, “No!”
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The upshot is the impasse confronting the County. Understandably, the State does not want to pay a bill which it sees as the local taxpayer’s debt. The local taxpayer does not want to pay a bill which he sees as the federal government’s legal obligation.
As one drives around Josephine County, Oregon one is struck by the number of Gadsden flags flying about the countryside. One can understand. The Gadsden motto, “Don’t tread on me,” is not hostile. It is the citizen’s way of saying, “Please, leave me alone.”
© 2013 Jack Swift - All Rights Reserved
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E-Mail: jhswft@earthlink.net
