What is ‘PILT’ and why do we need a permanent solution?
Feb. 17, 2014
The acronym “PILT” is more than just an odd abbreviation. PILT stands for Payment In Lieu of Taxes, a program created by Congress in 1976. Simply put, PILT provides federal funding to counties that host large tracts of non-taxable federal land, reimbursing the counties for services required on those lands and making it possible for county governments to provide police and fire protection, road maintenance and necessary health care services.
In the nearly four decades since PILT’s creation, counties all across America — and especially in Arizona and the West — have come to rely on these funds, especially after the recent economic downturn slashed county budgets and resources to the bone and beyond.
For Arizona’s counties, PILT funding in fiscal 2013 amounted to $32 million, tied to the state’s more than 28 million acres of federal land. These payments included game-changing amounts in rural counties like Yuma and Mohave, which each received $3.24 million from the program, and Gila and Yavapai counties, which each received about $3 million in FY2013.
PILT funding has made headlines over the past few months when Congress failed to extend the program for FY2014, a decision that potentially could have crippled a number of Arizona’s counties. Without these payments, the burden of funding services on untaxed federal land would fall to Arizona taxpayers, who would pay this tab through higher property taxes, instead of the money coming from our federal tax payments.
Fortunately, on the heels of a letter to Congress from the Arizona Association of Counties and intense national lobbying on counties’ behalf, the U.S. House added PILT funding for FY2014 to the farm bill (approved last week by Congress and signed by President Obama.)
That collective sigh you heard was the sound of relief, the deep breath brought on by a budget crisis averted, at least for one year. Momentary relief, however, is not good enough.
As a Mohave County supervisor and the president of Arizona Association of Counties, I’ve seen firsthand how much PILT funding means to counties and to taxpayers who rely on counties to provide first responders, transportation infrastructure, education and waste disposal. Because federal lands create for counties a substantial loss in tax revenue — while creating a need for costly services on those lands, to be paid for by local taxpayers — PILT funding cannot be allowed to end up subject to political whim and Washington D.C. catfights.
As a county leader, it’s my hope that Congress hears loud and clear the clamor from Arizona, the West and the nation as a whole. We must have certainty when it comes to PILT funds, a long-term, permanent funding solution that will put counties and taxpayers at ease. Nationwide, 1,900 local entities must not be left wondering if and when that much-needed check will be in the mail.
PILT, as I said, is more than just an odd abbreviation. This program sends us tax dollars that our counties must get back from the federal government to pay for services created by 28 million acres of federal lands in our state. Let’s hope Congress acts in a practical, efficient way and solves this problem for good, not just for the next few months.
— Buster Johnson, Mohave County supervisor for District 3, is president of the Arizona Association of Counties.
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