Grand County will receive Payments in Lieu of Taxes (PILT) in 2014 due to the U.S. Senate passing the Farm Bill that included PILT monies on Monday, Feb. 4.
The Grand County Council expressed concern that PILT monies would not given during the 2014 fiscal year after it was not included in the Omnibus Bill in January.
Grand County received $1.1 million for 1,723,769 acres of federal lands in 2013.
Had the PILT money not been approved, the county’s budget would have been severely affected.
“The county would have likely had to cut an average of more than 11-percent of the budget,” said county administrator Ruth Dillon. “With most operating budgets at bare-bones status, this would have been a challenge unless offsetting revenues were to make up the difference this year.”
Grand County clerk Diana Carroll said that the county’s overall budget is $9.3 million.
She said that if the county didn’t receive PILT it would be cutting budgets.
PILT are federal payments to local governments that help offset losses in property taxes due to non-taxable federal lands within their boundaries. Counties began receiving PILT in 1977.
Utah received more than $35 million in PILT in 2013. The formula used to compute the county payments is contained in the PILT Act and is based on population, receipt sharing payments, and the amount of federal land within an affected county.
The Farm Bill authorized $425 million in PILT to help rural communities pay for basic services such as police and fire protection and road maintenance. The PILT funding through the Farm Bill is available for one year.
Congressman Rob Bishop said that money for PILT needs to be found each year.
“The problem is that in 2008 PILT was unwisely removed from the appropriations process and funded by TARP, a source of revenue that has since expired,” Bishop said. “Now we are in a situation where we have to find a new funding source for PILT.”
Bishop said in addition to finding permanent funding for PILT, the federal government needs to pay for the true value of the land.
“Counties with federal land in their jurisdictions are denied tax revenues typical of communities with privately owned land. The diminished tax base hinders rural communities from fulfilling some of their most basic functions. In some counties, 90-percent or more of the land is federally owned. The PILT program helps offset the loss of these important revenues and fulfill the federal government’s obligation to local communities where swaths of federal land exist.”
According to a county resolution passed in October to create a federal lands committee, 75-percent of the land within Grand County is managed by the federal government. It also stated that 2.5 million visitors travel to Grand County to enjoy those federal lands.
PILT pays approximately $450 million a year to Western counties.
“When you put it at the lowest property tax rate, it would be between $1 and $1.5 billion,” he said. “We have to reform the system so we have a better more substantial way to reimburse counties for the expenses they have for federal lands,” Bishop said.
Bishop cited costs such as road maintenance and search and rescue on federal lands as increased expenses.
Rep. Jason Chaffetz wrote a letter to county commissioners and councils in January as concerns were expressed about whether PILT would be funded.
“I fully understand the importance of PILT funding, particularly to rural communities. According to the Census Bureau, property taxes accounted for 47-percent of local government general tax revenues nationwide in FY 2011,” Chaffetz wrote.
Chaffetz stated that property taxes are a major source of funding local government services such as education, transportation and public safety.
“The federal government has an obligation to compensate local governments for lands that it owns, especially in areas like rural Utah, where federal land ownership is significant,” Chaffetz said. “Ultimately, the long-term solution to the PILT problem is the transfer of federal lands to the states, just as the federal government did many decades ago with states east of the Rockies.”
Sen. Orrin Hatch pointed out that more than 60 percent of the land in Utah is owned by the federal government.
“Which means that communities across the state cannot collect property taxes to help fund basic community needs,” Hatch said. “PILT ensures that Utahns have access to the services they need even though the federal government owns such a significant amount of land in our state.”
Payments In Lieu of Taxes on federal lands funded through Farm Bill
“With most operating budgets at bare-bones status, this would have been a challenge unless offsetting revenues were to make up the difference this year.”
