SALEM, Ore. (AP) - Rural counties that face financial collapse from the loss of federal timber payments need to raise local taxes while the Oregon Legislature and Congress grapple with long-term solutions to a problem that touches the entire state, a task force told the governor Monday.

The top recommendation among 54 handed to Gov. Ted Kulongoski was to get Congress to renew for four more years the long-standing program that has brought more than $200 million a year to Oregon.

That would give the state and counties time to develop new sources of revenue, the task force said.

Meanwhile, the task force recommended that counties facing the worst financial crises should raise local property taxes by up to 30 percent while the state adopts measures to provide more help and presses the federal government to increase logging and revenues distributed to counties.

The state can help with public safety, health, taxation and assessment, roads and economic development, but that will amount to only 15 percent of the shortfall suffered by counties, said Tim Nesbitt, the governor's deputy chief of staff who was chairman of the task force.

"If anyone thinks that there is a single answer to this, that there is some magic solution that is going to correct all of it, it's not true," Kulongoski said. "This is going to take multiple decisions, multiple choices by local governments, by the state. It starts ... by the need of the federal government to give us a little breathing room."

Congress has repeatedly been unwilling to do that. A four-year extension and a one-year extension both failed this year, and the last of the money from a safety net program runs out at the end of this month.

Kulongoski said it was time for people to realize that the days when federal timber money was dependable and plentiful are gone forever.

For generations, revenue from cutting timber on national forests allowed many rural counties in the West to build roads and schools and cover other expenses, while charging little in property taxes.

In the 1990s, though, restrictions aimed at protecting spotted owls, salmon and other wildlife led to severe cutbacks in logging, and Congress authorized subsidies to timber communities to cushion the blow. As the subsidies ran out, counties closed libraries, laid off sheriff's deputies and cut back on road maintenance.

While federal timber payments continue, they are a fraction of what they used to be. Timber cut on national forests in Oregon is just 6 percent of the 5 billion board feet it once was, State Forester Marvin Brown said.

However, it appears that up to 38 percent of past timber revenues could be restored with better forest practices to combat wildfire and global warming, Brown said. Counties could also benefit from carbon credits paid for leaving forests standing to combat global warming.

The task force found hope in plans by the U.S. Bureau of Land Management to ramp up logging in Western Oregon, and ultimately to turn over management of those lands to the state. However, those plans have run into problems meeting environmental safeguards for the northern spotted owl and salmon, and environmental groups hope to stop the project in court.

Mike McArthur, executive director of the Association of Oregon Counties, said the task force recommendations appeared realistic, yet inadequate to replace the money.

The task force concluded that 12 Oregon counties face a funding crisis. They are Curry, Josephine, Klamath, Lane, Polk, Columbia, Wasco, Wheeler, Harney, Baker, Union and Wallowa.

Twelve more are hard hit: Tillamook, Lincoln, Coos, Douglas, Jackson, Lake, Deschutes, Crook, Jefferson, Linn, Hood River and Grant.

In all, county general funds are losing $110 million, county road funds $95 million, and Oregon schools $32 million, for a total of $238 million. For some counties, the loss is 60 percent of the general fund, and 70 percent of the road fund.

Even urban counties face losses in school funding. The Portland metropolitan counties Multnomah, Washington, and Clackamas will lose $13.4 million a year. That translates to 165 fewer teachers, or increasing class sizes by one student in every classroom from kindergarten through fifth grade.

The task force said state constitutional limitations on property taxes leave counties handcuffed trying to deal with the revenue problem.

Josephine County, for example, has a county tax rate of 60 cents per $1,000 valuation, compared to the state average of $2.80, Nesbitt said. Any increase has to be approved by voters, and is good for only five years.

To make up the loss of federal timber funds would require Josephine County to increase taxes more than 400 percent, Douglas County more than 300 percent, and Lane County 50 percent, he added.

An increase of 30 percent seems more realistic, Nesbitt said.

To read the full Task Force Report, click here.

(Copyright 2008 by The Associated Press. All Rights Reserved.)