NACo News Watch

County services in jeopardy if Congress fails to fund PILT
NACo issued a press statement indicating that "America’s counties will have no option but to severely reduce or eliminate critical county services to the public if Congress fails to deliver funding for the Payment in Lieu of Taxes (PILT) program in the FY2014 Omnibus spending bill."

The word is getting out across the country and on Capitol Hill. Below is an article in Environment & Energy Daily, a widely read publication in the nation's capital.  

Future of PILT in doubt after program funding is cut from omnibus bill By Scott Streater and Phil Taylor
Tuesday, January 14, 2014

Funding for a federal program that pays hundreds of millions of dollars a year to rural counties with large tracts of federal lands to offset losses in property tax revenue will not be included in the fiscal 2014 omnibus appropriations bill.

Instead, according to a summary of the bill released late yesterday, congressional appropriators are kicking the issue back to the authorizing committees in the Senate and House to see if they can find the roughly $400 million needed to fund the payments in lieu of taxes (PILT) program outside of discretionary budgets.

Colorado Sen. Mark Udall (D) offered another possible solution, filing a bill late yesterday that would permanently fund PILT payments to local governments through the Interior Department.

Since the PILT payments began in 1977, Interior has distributed $6.3 billion to states and territories to help nearly 2,000 counties fund critical services such as firefighting, law enforcement and public schools, as well as infrastructure improvement projects.

Local county governments plan on the annual payments and include them in their budget planning processes. Eliminating the program would be devastating to the mostly Western counties whose boundaries can be composed of more than half federal lands that cannot be taxed, said Ryan Yates, associate legislative director for the National Association of Counties in Washington, D.C.

"At this point in history, we've never been this far along in the fiscal budget year without some certainty on the PILT fund, so we're in a bit of quandary here," Yates said.

The PILT program has been a source of contention in recent years. Congress in 2008 approved a five-year extension of PILT payments, and in summer 2012 approved a one-year extension for fiscal 2013.

President Obama's fiscal 2014 budget included a request to Congress to approve another one-year extension.

The omnibus bill summary from the House Appropriations Committee states that the committee "has been provided assurances that PILT payments for fiscal year 2014 will be addressed expeditiously by the appropriate authorizing committees of jurisdiction in the House and Senate."

But Yates said that assurances from congressional leaders and staffers that they will make every effort to find the money to fund the program don't allay the fears of county leaders who depend on the payments.

"We've received plenty of assurances, but no funding yet for the counties," he said. "While we appreciate the assurances for continued funding, that doesn't provide salaries for our law enforcement officers, keep our jails open or provide health-related services."

Indeed, repeated efforts from top leaders in the Senate and House to convince the appropriations committees to fully fund the PILT program were unsuccessful.

Earlier yesterday, before the omnibus appropriations bill was released, Rep. Rob Bishop (R-Utah) and 30 other members of Congress representing 21 states sent a letter to Senate Appropriations Chairwoman Barbara Mikulski (D-Md.) and House Appropriations Chairman Hal Rogers (R-Ky.) asking that they include full funding of the PILT program in the omnibus bill.

"Counties with federal land in their jurisdictions provide vital services on those lands, such as solid waste management, search and rescue and emergency medical services. Yet, these same counties are grossly disadvantaged in their ability to fund these services because of the high presence of federally owned lands," the three-paragraph letter said. "In some counties, 90 percent or more of the land is federally owned and is neither taxable nor productive. The PILT program helps offset the loss of these important revenues and fulfill the federal government's obligation to local communities with large amounts of federal land."

A different course of action

One potential solution is Udall's bill, filed yesterday just hours before the omnibus appropriations bill.
Fellow Colorado Sen. Michael Bennet (D) is co-sponsoring the bill.

Udall said his bill is designed to ensure that the PILT program is not subjected to the annual uncertainty and ongoing congressional bickering over the federal budgetary process.

The PILT payments last year were cut slightly due to budget sequestration, and Congress has yet to fund this year's payments.

"The PILT program is essential for rural communities and counties near Colorado's public lands," Udall said in a statement. "My legislation ensures that our communities can reliably support their police departments, firefighters, schools and other services that help maintain public safety and our quality of life. This smart investment will help create jobs and promote economic growth in counties across Colorado."

Udall's bill would amend Chapter 69, Title 31 of the U.S. Code to strike references to the earlier PILT program extensions for fiscal 2008 through 2013 and replace them with "fiscal year," ensuring the program is automatically funded each year.

Such an effort is sure to have broad bipartisan support in the West.

Nearly four dozen House lawmakers from both parties in November sent a letter to Budget Committee leaders and ranking members in the House and Senate urging them to provide full funding to the PILT program (E&E Daily, Nov. 22, 2013).
And last month, the Western Governors' Association and the National Association of Counties sent a letter to budget appropriators asking them to include about $400 million in payments in lieu of taxes in their 2014 spending bill.