Road fund reserves take $3 million hit in county budget
by Brent Shrum, Kootenai Valley Record
September 25, 2008
Lincoln County’s $21 million road fund reserve is set to drop by more than $3 million under a 2008-2009 budget approved last week by the county commissioners.
The road budget cuts heavily into the reserves due to the anticipated loss of federal funding under the Secure Rural Schools and Community Self-Determination Act of 2000. The law, which provides stable payments to counties formerly dependent on national forest timber receipts, has expired, and the possibility for reauthorization by Congress remains uncertain.
The county’s road fund reserve was built up over years in which timber revenues exceeded costs for road maintenance. Under a 1908 law, counties received 25 percent of forest receipts for roads and schools. Montana allocated two-thirds to roads and one-third to schools, with the bulk of the school money going to a statewide equalization fund.
After timber harvests dropped in the late 1990s, Congress passed the new law setting annual payments at an average of the three highest years of the previous decade. For Lincoln County, the formula provides more than $5.8 million per year, with 15 percent taken off the top for special forest-related projects and the remainder divided among roads and schools.
With the expiration of the law and the return to the 25 percent share of receipts, federal funding for Lincoln County’s roads is expected to drop from more than $3 million to around $600,000.
The decline in the road fund reserve will have impacts beyond patching potholes and plowing snow. Interest earnings – more than $1 million annually – have been used to support the county’s general fund. The expected loss of federal support for the road fund has resulted in belt tightening throughout the county, noted Commissioner Rita Windom.
"We’re very happy with where we are with this budget," she said. "Our department heads have worked very hard for the last several years to keep their budgets the same without any increase."
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Editor’s Note: See the September 22, 2008 edition of the Kootenai Valley Record for the printed version of this story. The Kootenai Valley Record publishes once a week, on Monday, in Libby, Montana. They are a locally owned community newspaper, located at 403 Mineral Avenue in Libby. For in-county and out-of-county subscription information, call 406-293-2424, or e-mail kvrecord@gmail.com.
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