Western Local Leaders: Federal Payments for Tax-Exempt Lands Not a ‘County Welfare Program’

Sunset over Glacier National Park, in Montana, with forest fire haze.

Sunset over Glacier National Park, in Montana, with forest fire haze. Shutterstock.com/ Thomas DiMauro


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County commissioners visited Capitol Hill last week to defend a pair of federal programs they say are crucial to their budgets.

WASHINGTON — County government officials from the western U.S. met with congressional lawmakers last week to press for funding for two programs that provide payments to counties with tax-exempt tracts of federal land.

Payments in Lieu of Taxes and Secure Rural Schools provide significant support for some county budgets, particularly in the West. County leaders say if the programs are shortchanged, it could undermine services like road maintenance, education and policing.

“PILT and SRS are an essential part of the federal government's responsibility to the western counties especially,” Jim French, a commissioner in Humboldt County, Nevada, said Friday by phone, using common abbreviations for the two programs.

County officials are urging lawmakers to allot $480 million for PILT in the upcoming 2018 fiscal year and to reauthorize Secure Rural Schools, which expired about two years ago.

For the current fiscal year, Congress appropriated $465 million for PILT.

Under the PILT program, the federal government provides payments to localities with non-taxable federal lands within their boundaries.

These lands comprise more than 90 percent of the area in some counties, limiting the amount of property that’s available to generate local property tax revenue. In Humboldt County, where French is from, about 80 percent of the land is included in the PILT program.

Secure Rural Schools has in prior years funneled money to hundreds of counties located near national forests. The money has helped pay for schools, roads and other services. Enacted in 2000, the program was designed to help offset declines in federal timber harvest revenues going to these places.

President Trump’s budget proposal calls for about $397 million to go to the Payments in Lieu of Taxes program in fiscal 2018.

Spending legislation in the U.S. House includes $465 million for it in the upcoming 2018 budget cycle. But Jonathan Shuffield, associate legislative director for public lands for the National Association of Counties, explained that this figure is a placeholder amount of sorts and that lawmakers have asked the U.S. Department of Interior to recalculate what the appropriate full-funding figure should be.

Meanwhile, funding has ebbed under Secure Rural Schools. “We haven't received that in two years,” said Greg Chilcott, chairman of the Ravalli County, Montana Board of Commissioners.

The program was reauthorized retroactively in April 2015 to cover payments for fiscal years 2014 and 2015. For fiscal 2015, Secure Rural Schools provided $278 million to over 700 rural counties and other jurisdictions, according to the National Association of Counties.

But, since then, the program has expired.

With it unauthorized, federal payments to forest counties revert to substantially reduced amounts—about 80 percent less in some cases—under what’s known as the Twenty-Five Percent Fund Act of 1908.

U.S. Sen. Orrin Hatch, a Utah Republican, introduced legislation in May that would extend Secure Rural Schools payments for two years. That bill has 20 cosponsors, 11 of them Democrats, and has been referred to the Energy and Natural Resources Committee.

In the House, U.S. Rep. Cathy McMorris Rodgers, a Washington Republican, introduced a similar bill. It has 36 cosponsors, including a dozen Democrats, and has been referred to the House committees on Agriculture and Natural Resources.

Chilcott said it would not be uncommon for PILT to make up more than 20 percent of a county’s general fund, or for Secure Rural Schools to cover up to 50 percent of a county’s road budget.

"The urgency for us is making sure we know what the number is before we set our budgets,” he said.

The county leaders who came to the nation’s capital last week to lobby in support of PILT and Secure Rural Schools met with about 65 lawmakers. They were also scheduled to meet with officials from the Interior Department and the U.S. Department of Agriculture.

French said he sensed bipartisan support for PILT and Secure Rural Schools in the meetings with members of Congress. But he also said there can be a “regional misconception” among counties “east of the Mississippi River” about how the programs work.

“There's a nasty little rumor,” he said, “talking about ‘a county welfare program.’”

“Those folks that don’t really depend on it and have the ability to fully tax the property that is in their states,” French added as he discussed PILT and Secure Rural Schools, “don’t quite understand.”

Bill Lucia is a Senior Reporter for Government Executive’s Route Fifty and is based in Washington, D.C.

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