SALEM — Oregon timber counties could be headed for insolvency by the end of June if federal relief payments don't resume, House Co-Speaker Bruce Hanna said Tuesday at a forum organized by The Associated Press.

Speaking to editors and reporters about the upcoming legislative session, Hanna and other lawmakers warned of dire consequences if Congress doesn't reauthorize payments to compensate counties for revenue lost to logging restrictions on federal forests.

The payments ended in the current fiscal year. Timber counties, including Douglas County, will lose $230 million a year with the demise of the Secure Rural Schools and Community Self-Determination Act.

Curry County is expected to be the first to fail, with Coos and Josephine counties also expected to face difficulties in maintaining services in the upcoming fiscal year.

By tucking away money over a number of years, Douglas County is in better shape than most other Oregon timber counties. The county has $80 million in its public works reserve fund and another $66 million in general fund reserves.

Curry County officials are considering a ballot measure to raise the county's property tax rate, but that county's small tax base means a tax increase would raise relatively little money.

“The solution to their problem is harvest of timber on the federal land that makes up their county. Because they get the revenue and they get the jobs. They get the double bang for the buck,” said Hanna, R-Winchester.

Oregon federal lawmakers are working on increasing timber harvests on the 2.2 million acres of Oregon & California Railroad trust lands, but they face a long fight. Realistically, it's going to take four to five years to implement a plan, Gov. John Kitzhaber said at the AP forum. Meanwhile, some sort of funding is necessary, he said.

“There's no magic pot of money here in the state to bail them out,” Kitzhaber said.

House Co-Speaker Arnie Roblan, D-Coos Bay, said the state needs to figure out a way to help counties facing bankruptcy.

“This is a serious issue, and it's going to continue to be a serious issue,” Roblan said.

Oregon law allows counties to merge upon a vote by residents of both counties, but Kitzhaber said that does not seem to be a practical solution.

“The tax base would become the average of the two, so there's not much incentive for a well-heeled county, or a better-heeled county, to absorb the debt of the other county while their revenues essentially go down. It's very problematic,” Kitzhaber said.

The Democratic governor suggested that some government functions might be delivered more efficiently on a wider scale.

“There's a lot of duplication in terms of jail space, in terms of law enforcement, in terms of just local government,” Kitzhaber said. “Maybe there are certain functions of local government that could be done on a more regional basis.”

He said the Legislature, when it convenes a week from today, might look at allowing counties more flexibility in spending their money. Curry County, for example, has $33 million in a road fund. By law, the money must be used to build and maintain roads, not for general county services.

• You can reach reporter John Sowell at 541-957-4209 or by email at jsowell@nrtoday.com.