Feds grant Oregon counties $30 million for their tax-exempt federal land

The Owyhee River Canyon Wilderness Study Area in Idaho and Malheur County includes 10,380 acres of federal and state land. (Courtesy of Bureau of Land Management)

The federal government has awarded more than $30 million to Oregon counties in compensation for serving tax-exempt federal land within their borders.

The U.S. Department of the Interior distributed the money last month as part of its Payments in Lieu of Taxes program, which compensates counties for money they spend on roads, police and other services on federal land that they can’t tax. This year’s payments nationwide totaled $621.2 million and helped plug the budgets of many small and rural counties.

In Oregon, every county received something, though amounts varied based on a federal formula that takes account of the acreage of federal land and population. Deschutes County, with 1.4 million acres of federally administered land, came out on top – drawing more than $3.6 million.

Kimberly Katchur, a spokesperson for the county, said the largest chunk, $2.4 million, went toward developing and maintaining 900 miles of roadway, including for regular maintenance work like patching potholes and snow and ice control. Another $840,000 went into the general fund for a range of services, from public health to property management to dog control.

Though the money represents less than 2% of general fund discretionary spending in Deschutes County, it accounts for nearly 10% of road funds and more than 12% of natural resources revenue, which is used for wildfire prevention.

Katchur said the money was a “critical funding resource to offset lost property taxes revenue” from the federal land.

Officials granted Malheur County, with nearly 4.3 million acres of federal land, the second highest amount: about $3.5 million.

Malheur County Judge Dan Joyce said the money arrived last month on the same day that the county finalized its $25 million budget for the next fiscal year.

“This payment is about 15% of that budget, so, yes, it’s significant,” Joyce said.

He said the money will be used to plug budget gaps across agencies, from police and fire to the assessor’s office and the circuit court.

In the past, Joyce has made yearly lobbying trips to Washington D.C. for the Association of Oregon Counties to talk about the importance of maintaining the yearly payments with new House members. Though the payments have never been cut off since they were first launched in 1977, counties don’t take them for granted, he said. Sometimes, Congress has guaranteed the money for five years, which gives counties fiscal predictability.

“We like the five-year program,” Joyce said.

Two of Oregon’s most populous counties, Multnomah and Washington, received among the smallest amounts: about $65,400 and nearly $47,000 respectively. Multnomah has about 82,000 acres of federal land while Washington has nearly 14,000. Clatsop County on the coast has the least amount of federal land, nearly 1,600 acres, and it received nearly $8,000 – the least by far.

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