Protecting PILT

October 25, 2019

Many Americans might be surprised to find out that most of the land west of the Rocky Mountains is owned by the federal government. In fact, if they were to look at a map highlighting this land, they would see that more than 50% of it is owned by the federal government. In Utah, the percentage is even higher: the federal government owns more than two thirds of the land.

For our state, and for other states in the West, this presents some unique – and very substantial – challenges. Chief among them is the fact that the federal government has deprived states, counties, and local jurisdictions from the ability to collect property taxes on this land. And unlike other property owners, the federal government itself does not pay property taxes on the land that it owns in these states.

The result?

Many areas with high concentrations of federal land are impoverished. Without a property tax base, these communities are deprived of money vital for funding local schools, building roads and public infrastructure, and paying for firefighters, police, and search and rescue services.

That’s where the Payment in Lieu of Taxes program comes in, or PILT. The federal government created this program to offset some of the disproportionate burden placed on the shoulders of public lands states and communities by providing funding to help compensate for the loss of property tax revenue.

So each year, the Department of Interior calculates each county’s annual payment by taking into account its population, the amount of federal land it has, and receipts it has from other revenue-sharing programs. Since its inception in 1977, PILT has distributed more than $8.5 billion to 1,900 local governments across the country.

The problem, however, is that PILT funding has historically been woefully inadequate. PILT payments have unfortunately tended to be a small fraction of what state and local governments could generate through property taxes if they owned the land within their borders.

This yet again unfairly affects rural, vulnerable communities who are struggling to fund their schools, infrastructure, and community services.

That’s why, as I continue to represent the state of Utah in the Senate, I will keep working to ensure that the PILT program remains in existence; and to increase its payments so that it reflects at least a rough equivalent to the amount of money that the taxing jurisdiction could would collect at its lowest rate.

It’s only right that we ensure that the citizens of Utah, and our public lands states generally, have the means they need to both survive and thrive.