When a jury in Linn County determined last week that the state had breached its contract with 13 rural counties by failing to maximize logging revenues on state land, the damage award was breathtaking.
$1,065,919,400.
The state plans to appeal -- to the Supreme Court if necessary. In fact, Department of Justice lawyers spent a good deal of the trial building a record for that appeal, which could start with a variety of motions in Linn County before Judge Thomas McHill enters a final judgement.
But the clock is ticking on the largest-ever legal award against the state of Oregon. The judgement, when filed, will accrue interest at 9% annually, adding an additional $96 million a year to the tab while its out on appeal.
And if the state loses its appeal?
“It’s going to cost a lot of money and I don’t know where it would come from,” said Sen. Betsy Johnson, D-Scappoose, a legislative budget chief whose district includes two of the three counties that stand to reap the biggest windfalls.
“The ramifications to the state’s budget could conceivably be catastrophic.”
The fallout would reverberate far and wide, including in many counties that filed the lawsuit. Indeed, the damages, if upheld, would be a bonanza for a handful of counties and special taxing districts. But if you consider the portion of the award that would be borne by taxpayers in each county, paying the bill would effectively create a net loss for more than half of the counties who signed on to sue the state, according to an analysis by The Oregonian/OregonLive.
“Basically, you’re suing yourself, or your own family, and it comes out of the family budget,” said Joe Cortright, a Portland economist. “If they believe that pound of flesh is going to be extracted from someone else, it’s hard to see how that would work.”
What follows is a discussion of some of the major questions raised by the jury award and its consequences.
What was the basis of the damage award?
Oregon’s state forests are mostly made up of lands that were originally logged over or burned by wildfire. Without the resources to rehabilitate the lands,15 so-called “forest trust land counties subsequently deeded the forests to the state. In exchange, the state agreed to replant the forests, protect them from fire, and share a portion of the timber harvest proceeds when they returned to productivity.
Failing_Forestry_Photo
This graphic assumes Oregon’s individual taxpayers will pick up the bill for $1.1 billion in damages awarded to 13 rural counties and 151 special taxing districts. Those counties are outlined in black. Hover your cursor over each county to see their damage award, their taxpayers prospective liability for the damages, and the net proceeds to each county. (Graphic by David Cansler/The Oregonian)
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Failing Forestry: With $1 Billion Timber Lawsuit, Not All 14 Counties Are Big Winners
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Ted Sickinger | THe Oregonian/Oregonlive | november 26, 2019
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