National Association of Counties
Washington, D.C.

 NACo testifies before Senate on payment in lieu of taxes

By Ryan R. Yates

NACo has urged Congress to extend mandatory funding provisions for the Payment in Lieu of Taxes (PILT) program, in testimony before the U.S. Senate Energy and Natural Resources Committee.
Ryan R. Yates, NACo associate legislative director, said local governments have relied on PILT for more than 30 years to provide payments to counties and other local governments to offset losses in tax revenues due to the presence of substantial acreage of federal land in their jurisdictions.

Local governments are unable to tax the property values or products derived from federal lands, therefore these payments support essential county services including law enforcement, emergency response, transportation infrastructure and access to health care.

Photo by Jack Hernandez
Ryan Yates (r), NACo associate legislative director, testifies before the Senate Environment and Natural Resources Committee in defense of PILT funding with Paul Pearce, president of the National Forest Counties and Schools Coalition and a former Skamania County, Wash. commissioner.
At the March 20 hearing, NACo also cautioned the committee against pursuing legislative efforts to consolidate PILT with other federal land management revenue-sharing programs such as Secure Rural Schools. Testimony by the group Headwaters Economics promoted such a consolidation to “reduce costs to federal taxpayers” and redistribute funding under a new program to counties “that have the greatest economic needs.”
Yates said, “While Congress may seek to fund both SRS and PILT on the same legislative vehicle, NACo opposes any effort to consolidate PILT with any natural resource based revenue-sharing program.

“Any consolidation of these two would be disastrous for federal land counties and would ultimately politicize an otherwise apolitical and straightforward federal program.”

NACo also provided guidance on possible legislative efforts to reform or streamline the PILT formula including the elimination of population caps and prior-year payment reductions from the program’s distribution formula.

“Visitor populations are not taken into consideration by the current PILT formulas,” Yates added. “Counties are required by law to provide services to people — regardless of their place of residence.” Regarding population caps, the federal government should not reduce its tax obligation to local governments, solely because of other land-management revenue agreements between governments, he said.

The hearing also highlighted provisions in the Senate’s FY14 budget resolution that would include a deficit-neutral reserve fund for rural counties and schools to provide for the reauthorization of SRS or changes to the PILT program, or both. The commitment from the Senate Budget Committee provides a major step forward toward securing the government’s financial commitment to rural, public land counties.

“NACo applauds Chairman Ron Wyden and Ranking Member Lisa Murkowski for holding the hearing to highlight the importance of PILT and federal revenue-sharing programs to county governments,” said Mike Murray, NACo Public Lands Steering Committee chair, Lewis and Clark County, Mont.

“Counties look forward to working with members of the committee and staff to develop and pass legislation that will continue the historic partnership between federal and county governments by extending continued mandatory funding for the PILT program for FY14 and beyond,” he added.