Good news, bad news for PILT counties

The good news is many counties with federal lands inside their boundaries will receive higher payments under the Payment in Lieu of Taxes program in the coming fiscal year. The bad news is those increases will be nowhere near what county officials think they should be.

The congressional appropriation for the PILT program moved up $6.5 million to $120 million in fiscal 1998, which started on Oct. 1.

But that is still way below the $212 million Congress authorized when it made some changes in the PILT law in 1994. Still, as National Association of Counties Associate Legislative Director Jeff Arnold notes, “No one gave us a shot at getting an increase this year. So I am enough of an optimist to think there is hope we can get increases in the future.”

PILT payments to about 1,800 of the nation’s 3,072 counties began in 1976. The money goes to counties that administer lands owned by agencies such as the U.S. Forest Service, Bureau of Land Management, National Park Service and U.S. Fish and Wildlife Service, agencies that, because they are arms of the federal government, do not pay taxes to the counties. The PILT program finances services like fire-fighting and solid waste disposal that would otherwise depend on taxes.

In 1976, the PILT appropriation was set at $101 million. That figure remained stable until fiscal 1995 when it was increased to $113 million. But besides the fact that the $120 million appropriation in fiscal 1998 is still way below the authorized amount of $212 million, that dollar figure is unimpressive for two other reasons.

The PILT payments are significantly lower than what the counties would earn if their federal land was even minimally taxable. In Montrose County, Colo., for example, 970,000 of the county’s 1.4 million acres are federal lands. Cindy Bowen, one of Montrose’s three county commissioners, says the county thinks that, were the land in private hands, it could be taxed at $2.12 an acre. That would bring in a bit over $2 million. In fiscal 1997, however, the county’s PILT payment was just $665,680. (The county’s total budget, minus one-time construction projects, is about $30 million.)

PILT counties with Forest Service land have been hit by a double whammy. Since 1908, the Forest Service has been distributing to counties 25 percent of the revenue it raises from timber sales, campground charges, recreational activities and grazing fees. That was decent money – $1.7 billion ($850 million of it timber money) by 1990, according to Bill Timko, a Forest Service official.

Since the timber-cutting glory days of the Reagan and Bush administrations, however, revenue from sales of timber has fallen dramatically (or has been hidden off-budget). By 1996, timber revenue had fallen to $195 million.

“We used to get $250,000 for timber sales here,” says Ron Christensen, a county supervisor in Gila County, Ariz., where 97 percent of the land is federally owned. “That money went for schools and road work.” That revenue is no longer available. Nor does the recent $61,000 increase in Gila’s PILT payment, which is now $861,000, make up for that loss.

Congressional antipathy toward a program many see as addressing an issue primarily of concern to Western states is one problem for counties. Plus, PILT must compete against what Arnold calls, “some of the country’s crown jewels” – the national parks and National Endowment for Arts – for cash.

Still, residents from all over the country vacation in the PILT counties and depend on the availability of rescue teams and flushing toilets, so a narrow focus is self-defeating.