As the chair of the “Federal Land Payments Subcommittee of the National Association of Counties”, I feel it my duty to write this letter after hearing and reading about Mineral County, Montana sending a tax bill to the United States Forest Service, Department of Agriculture. This letter and tax bill was stimulated by the delay in the funding by Congress of two very important programs for local government. They are Secure Rural Schools (SRS) and Payment in Lieu of Taxes (PILT).
The tax bill in question was for Federal forest properties within their boundaries. The taxable values were calculated with information from the Montana Department of Revenue. To make a long story short, after estimating what the taxable value was and then applying millage, the tax bill sent was for 69 cents per acre. This is right at double what their PILT payment would be.
The Federal Land Policy Management Act of 1976 clearly states in Policy (13) “the Federal Government should, on a basis equitable to both the Federal and local taxpayer, provide for payments to compensate States and local governments for burdens created as a result of the immunity of Federal lands from State and local taxation.” The key here is that it has to be equitable to both. Meaning that: Congress can not over or under compensate counties. Over payment would be inequitable to the Federal taxpayer and under payment would be inequitable to the local taxpayer.
Some larger populated counties with significant Federal land acres seem to be upset with Mineral County for sending the tax bill. Why would they be upset or concerned about what Mineral County does? Well, I will tell you why: the Payment in Lieu of Taxes formula is to displace payments to counties is extremely inequitable. Large populated counties get huge payments per acre that are sometimes 4 to 5 times what private in-kind property taxes bring in to Montana counties as well as counties in other states. A significant number of counties in Montana receive more than $2.50 per acre in PILT which calculates to be right at 4 times what private in-kind property brings in taxes. And, at the same time, counties like Mineral County, Montana bring in only a third to a half in PILT payments of what private in-kind property would bring in. We have counties with low populations and large federal holdings in Montana still using 25 year old ambulances!
The National Association of Counties has policy in place that states the following: “NACo supports full funding of the PILT Program at it’s authorized level and support Legislative and/or Administrative efforts to modify the program to make payments to counties on a basis equitable to both the federal and local taxpayer that is non-discriminatory in nature” end quote. Isn’t that the same thing that Federal Policy states? Then why isn’t Congress doing it with wholehearted support from NACo?
Larger populated counties make the argument that because of their larger population they our entitled to those big payments due to higher demand and impacts to their local services. If that is the case, then why are they not taxing their own constituents at 4 times more then counties like Mineral? Am I making sense here?
And, where do almost all urban county residents go to recreate? Well, they go to the neighboring counties that are very rural with lots of public lands. Using that rural county’s infrastructure (especially county roads) to enjoy the great outdoors with family and friends. That rural county makes sure roads are maintained and access is there. That cost money that frankly a lot of rural counties don’t have much of due to tax exempt federal lands and very little PILT.
Congress already has the money in budget to correct this and has since 2008. They need to hear from you to make change.
Contact Senator Tester, Senator Daines and Congressman Gianforte. Tell them every county should be treated fairly like their own federal policy states.
Todd Devlin is Prairie County commissioner and a rancher and farmer who lives in Terry. He is past president of the Montana Association of Counties, chair of the National Association of Counties Federal Land Payments Committee, a member of the National Association of Counties Public Lands Committee, a board member of the Western Interstate Region of NACo, and chair of the National Association of Counties PILT Working Group.