U.S. Department of the Interior announces distribution of $733 million in Payments in Lieu of Taxes

Key Takeaways

On June 23, the U.S. Department of the Interior announced the payment of $733 million to over 1,900 local governments through the Payments in Lieu of Taxes (PILT) program. These funds support essential government services in public lands counties nationwide that are home to untaxable federal land.

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The Fiscal Year (FY) 2026 payments went to counties and townships in 49 states and the District of Columbia. Since PILT began in 1977, the program has distributed $13.4 billion to help fund transportation infrastructure, education, public safety, emergency response and more in counties across the country. Although the county services that PILT supports are mandatory, the program continues to be discretionary spending subject to the annual appropriations cycle.

What is PILT?

The federal government owns 28 percent of land in the United States – more than 640 million acres – and more than 60 percent of counties are home to some federal land. Although public lands are national assets, their costs fall locally. In these communities, counties often provide services on federal land such as law enforcement. Although counties principally raise revenue through property taxes, federal land is untaxable. PILT provides local governments with an acreage-based payment to help support those services.

PILT Resource Hub

In FY 2026, PILT provided $733 million in funding, an increase from FY 2025 payments which totaled $644.7 million. The increase was primarily driven by adjustments reflecting the 1-year lapse of the Secure Rural Schools (SRS) program, which provides funding to counties with National Forest land to support education and transportation. Counties’ payments are also adjusted to reflect inflation and any changes to the federal land estate.

Counties home to National Forests should expect any FY 2027 PILT payment, which would be distributed by July 1, 2027 if authorized by Congress, to reflect receipt of SRS funding authorized under the Secure Rural Schools Reauthorization Act of 2025 (P.L. 119-58). NACo continues to advocate for an extension of the SRS program before it expires on September 30, 2026.

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Next Steps

NACo continues to advocate for permanent, mandatory PILT to provide counties with continued fiscal certainty. Counties are not guaranteed an FY 2027 PILT payment, which is dependent on the annual appropriation process.