Payments in Lieu of Taxes

Payments in Lieu of Taxes
National Association of Counties
September 8, 2016

    When we talk of PILT funding, we should never lose sight of the fact that it is a very, very poor substitute for revenues generated locally by healthy economic activity.  Our ultimate objective should be not to institutionalize PILT funding, but to restore a healthy balance between federal land ownership and productive private ownership of the lands within each county in the nation.

    The House Natural Resources Committee has compiled a meticulous catalog of federal land holdings consolidated into a federal footprint map.  It is quite revealing.

    The federal government owns just 7/10ths of one percent of the State of New York.  It owns just 1.1 percent of the State of Illinois.  It owns just 1.8 percent of the State of Texas.

    But then go further west and you will see the problem.  The Federal Government owns and controls 62 percent of the state of Alaska, 2/3 of Utah and 81 percent of the state of Nevada.  It owns 48 percent of my home state of California.  Nearly half.  In one county in my district – Alpine County – the federal government owns 93 percent of the land.  

    And the people from the eastern half of the United States have no idea what that means.  That’s all land that’s off the local tax rolls.  That’s all land that carries increasingly severe restrictions on public use and access, which means it’s generating very little economic activity to these regions.  And often, federal ownership means that federal land use policies are in direct contravention to the wishes of the local communities that are entangled with it.

    More than a century ago, we began setting aside the most beautiful lands in the nation for the “use, resort and recreation” of the American people, in the words of the original Yosemite Grant signed by Abraham Lincoln in 1864. 

    But somewhere along the way, “public use, resort and recreation” became “look, but don’t touch.”  And the federal government became indiscriminate and voracious in the amount of land under its direct control.  

    My congressional district is in the heart of the Sierra Nevada.  Common complaints from my constituents and local government officials range from abusive federal regulatory enforcement, inflated fees that have forced families to abandon cabins they’ve held for generations, exorbitant new fees that are closing down long-established community events, road closures, and arbitrary denial of grazing permits for family ranchers who go back generations on that land.  A small town trying to install a $2 million spillway gate for their reservoir was just given a $6 million estimate from the Forest Service to relocate a hiking trail and a handful of campsites.  

    And we can’t even take care of the land we already own.  The National Park Service reports a $12 billion maintenance backlog.  Environmental restrictions on forest management have resulted in catastrophic overcrowding – we have roughly four times the tree density per acre that the land can support.  In that stressed condition, the trees lose their resilience to resist the impact of drought, pestilence and disease.  In the Sierra National Forest, an estimated 85 percent of the pine stock is now dead – posing a severe fire danger to the mountain communities and to the Yosemite National Park.

    So we can’t take care of the land we have and your local communities are stuck with an inattentive and incompetent landlord.  And PILT funding only makes a small dent in this bad situation.

    Tuolumne County includes much of Yosemite National Park and is one of the biggest recipients of PILT funding in my district.  The federal government owns 75 percent of the land in that county.  It gets $2.2 million in PILT funding out of roughly $150 million in operating revenue.  So the federal government sits on 75 percent of its potential property tax base and compensates it 1.5 percent of its budget in PILT funding.

    Fresno County is the largest PILT recipient in my district.  The federal government sits on 40 percent of its land and compensates it by one percent of its budget.

    Our short term goal is reauthorization and appropriation for next year.  There will be a short term CR and it will have reauthorization and appropriation funding in it for PILT.  It always does.  It most likely provide a one year authorization along with a very short term appropriation – most likely through December when the issue will be revisited in light of the election.  

    Our intermediate goal must be long term reauthorization, so that you don’t have to come back here every six to 12 months and so that you can plan long-term for what PILT funding you can expect to receive.  Counties impacted by excessive federal land ownership should not have to beg to reauthorize this compensation every year.  The problem is that every authorization must have a fiscal offset, and it is easier to find an offset one year at a time than for ten.  That is not an insoluble problem, but it is why the typical pattern of PILT authorization has been to take the path of least resistance, particularly with so many other fiscal issues demanding Congressional attention.

    But our long term goal must be to restore adequate land to every county to support a thriving local economy and an ample local tax base.  And that’s why we have to keep educating our eastern colleagues who don’t have this problem.  I point to little Alpine County and ask people to imagine how the economy of their community would fare if the federal government owned 93 percent of the land in their county, forbade or greatly restricted any economic activity on it, and ignored the pleas of their local city council or county board?

    I realize each county is different.  Mariposa County in my district includes Yosemite Valley, one of the crown jewels of the National Park System.  Obviously, the federal government’s presence there is essential for the preservation of this national treasure.  There is always going to be a bigger federal footprint there than other parts of the country.

    But we’ve got to restore balance and common sense to federal land ownership and management.  Look at the Federal District of Columbia.  Washington, D.C.  The nation’s capital.  Look at the national mall, all the government buildings, all the memorials and parks.  The federal government owns roughly one fourth of the land area of the federal capital.  There is no earthly reason it should be sitting on 2/3 of Utah, 4/5 of Nevada or half of California.  

    It reminds me of Lincoln’s story of the farmer who said, “I ain’t greedy for land – all I want is what’s next to mine.”

    The Federal Lands Subcommittee has three principal goals: to restore public access to the public lands; to restore sound management to the public lands; and to restore the federal government as a good neighbor to those communities most impacted by the federal lands.

    But overarching these imperatives is the simple fact that excessive federal land ownership in the West has become a stultifying drag on our economies and a direct impediment to taking good care of our public lands.  

    There needs to be a proper balance between federal ownership, state and local stewardship and the productive private ownership of lands.  One look at the federal footprint map should warn even the most casual observer that we have lost that balance, and we need to restore it.