Provide Full Mandatory Funding for the Payments in Lieu of Taxes (PILT) Program

Action Needed:

Urge your members of Congress to support mandatory full funding for the Payments in Lieu of Taxes (PILT) program. Because local governments are unable to tax products derived from or the property values of federal lands, PILT payments are necessary to support essential local government services. Unless Congress acts, counties will receive their last fully funded PILT disbursement in 2026.

Without mandatory full funding, PILT will remain a discretionary program subject to the annual appropriations process and could fall back to pre-2008 funding levels, devastating local government service delivery in areas with significant federal land ownership.

Background: 

The PILT program was created in 1976 to offset costs incurred by counties for services provided to federal employees and their families, the public and users of public lands. Federal land cannot be taxed by local governments, but counties still must provide important community services, including education, solid waste disposal, law enforcement, search and rescue, health care, environmental compliance, firefighting, parks and recreation and more. In fiscal year (FY) 2025, the PILT program disbursed more than $644 million in funding to support these services for both residents and visitors.

For nearly two decades, annual PILT funding levels remained static, and counties watched the value of their PILT receipts drop due to inflation. In 1995, NACo was successful in securing an amendment to the PILT formula (P.L. 103-397) which adjusted annual authorization levels for inflation. From its enactment in 1976 through 2007, PILT was a discretionary program subject to annual appropriations and, as a result, was underfunded year after year. The PILT program has also been funded through mandatory spending several times throughout its history.

Congress authorized full funding for the PILT program for FY 2026 as part of its annual Interior-Environment appropriations package (P.L. 119-74). The FY 2024 and FY 2023 Omnibus appropriations package ensured full funding for PILT to over 1,700 counties nationwide. PILT was fully funded in FY 2023 at $578.8 million and in FY 2022 at $549.4 million. In FY 2021, public lands counties received $529.7 million from PILT. The program was funded at $514.7 million in FYs 2019 and 2020. The FY 2018 Omnibus appropriations package, signed into law on March 23, 2018, funded PILT at $552.8 million. The Consolidated Appropriations Act of 2017 also fully funded PILT at $465 million for FY 2017. In FY 2014, PILT was extended through the farm bill (P.L. 113- 79) as a fully funded, mandatory entitlement program at $425 million. Mandatory funding of $399 million for FY 2013 was achieved through the Moving Ahead for Progress in the 21st Century Act (MAP-21) (P.L. 112-141). Previously, the enactment of the Emergency Economic Stabilization Act (P.L. 110-343) provided full funding for PILT from FY 2008 through FY 2012. 

Since the PILT program was created, several bills have been introduced to permanently authorize PILT as a mandatory spending program. In the 118th Congress, Reps. Brittany Petterson (D-Colo.) and John Duarte (R-Calif.) introduced the Permanently Authorizing PILT Act. Such legislation would ensure reliable, consistent funding for county governments.

Key Talking Points: 

• The PILT program provides payments to counties and other local governments to offset forgone tax revenues due to the presence of substantial federal land acreage within their jurisdictions.
• Because local governments are unable to tax the property values or products derived from federal lands, PILT payments are necessary to support essential local government services (mandated by law) such as education, emergency services, transportation infrastructure, law enforcement and health care in over 1,900 local governments in 49 states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands.
• Without predictable mandatory funding, PILT will remain a discretionary program subject to the annual appropriations process. Counties urge the administration and members of Congress to support long- term, predictable full funding for PILT.
• While Congress continues to discuss long-term legislative solutions for funding the PILT program, NACo will continue to urge leadership in both chambers and on both sides of the aisle to work together to fully fund the program.
• Urge your members of Congress to support and cosponsor legislation that would permanently fund the PILT program, giving local governments a reliable funding stream to support critical local infrastructure and services.