In the timber lawsuit brought against the state by Linn County and many other rural taxing units, an Albany jury last week awarded the plaintiffs $1.1 billion. If the verdict stands up on appeal, how would the state pay?
The plaintiffs — 13 counties and 151 local taxing districts — convinced the jury that the state forestry board and department, under pressure from Governor Kitzhaber and others, violated their contractual obligation to produce as much timber from some 600,000 acres of formerly county-owned timberland as they could have produced under sustained-yield management that put timber production as the top priority.
The Oregon Department of Forestry this biennium has a budget of just under $389 million, of which $145 million is for fire protection. Clearly the damage award can’t come from the state forests or the agency that runs them.
The legislature would have to fund the verdict from other sources, and probably over many years.
Linn County Commissioner Roger Nyquist thinks lottery bonds offer a solution. “The state,” he wrote in an email, “will likely have $1.2 billion available in bonding capacity from lottery funds in the next five years. By internal policy they have bonded up to 25 percent of projected lottery revenue on all kinds of things over the years. Light rail in Portland would be one example.
“They are going to spend those funds somewhere, I would submit that disbursing the money to taxing districts in struggling timber communities is as good (a) use as any.”
Budgeting the proceeds of lottery bonds would need a decision by the legislature. It’s possible, but whether it’s likely is another question.
The counties get two-thirds of the proceeds of timber sales on the forests in question and distribute most of that to other local units of government. Their court case was based on the idea that a 1941 state law called for the forests to be managed for their greatest “value,” that this constituted a contract, that “value” meant revenue, and that the state changed its approach in 2001 to manage the lands for various environmental purposes in addition to timber production.
As much as I sympathize with rural counties, it’s hard to believe that the state government can’t change its forest-management practices as conditions — and politics — change over 60 or 70 years.
One of the principles I learned half a century ago in poli-sci is that counties and other units of local goverment are creatures of their respective states. They are not sovereign entities of their own. Oregon, through the legislature or the people via an initiative, could reorganize county lines or even abolish counties altogether.
So it seems unlikely that counties could collect damages from the state for changing forest management practices based on an unwritten contract, even if the change was unfair or even unjust. That’s why this verdict may not survive the legal gauntlet of appeals. (hh)