Federal PILT could be on the chopping block

It’s the same battle every congressional budget cycle: States and counties depend on lawmakers to come up with a long-term answer to fund the federal Payments in Lieu of Taxes program, while Congress stalls on legislation that at best offers only short-term solutions. Although Congress passed stop-gap funding late last month to keep government agencies and programs running through Dec. 9, PILT may once again be on the legislative chopping block as lawmakers consider ways to shrink federal spending. This uncertainty has Mohave County Supervisor Buster Johnson worried. In June, Arizona received slightly more than $35 million with Mohave, Gila and Yuma counties at the top of the pack, each receiving $3.5 million, and Santa Cruz and Greenlee counties at the bottom with $900,000 each. The Arizona funding was part of nearly $452 million paid to 1,900 local governments by the Interior Department under the PILT program, which has been compensating counties and local governments since 1977 for non-taxable federal land in their jurisdictions. PILT program eligibility is reserved for local governments — mostly rural counties — that contain non-taxable federal lands and provide vital services, such as public safety, housing, social services and transportation. The Interior Department collects more than $11 billion in revenue annually from commercial activities on federal lands, such as oil and gas leasing, livestock grazing and timber harvesting. Since PILT payments began in 1977, DOI has distributed more than $7.5 billion to states and the District of Columbia, Puerto Rico, Guam and the Virgin Islands...more

PILT or cows?

Last Friday I posted the editorial Nevada should control its land and not settle for paltry alms and received the following comment from Floyd Rathbun:

The editorial on Payment in Lieu of Taxes (PILT) is right on the money.  It may be worse than the author indicates because the cost of having federal agencies write these checks has been the near destruction of our livestock industry.  Livestock grazing (ranching) represents an entire sector of local economies in Nevada and has been nearly destroyed by federal regulation.  Many Nevada county officials are indifferent to the loss of the economic benefits of agricultural production and the livestock industry in particular.  Our elected officials complain that they don’t receive enough money as local and state tax revenues but they have never seen a PILT check they didn’t like.  Their budgets even include PILT as a source of income forgetting that Congress could just say no more.

Loss of entire herds of cattle and sheep from Nevada’s range livestock industry means that the appraised values of ranches have been reduced by hundreds of millions of dollars over the past 40 years.  Our county officials don’t seem to mind that the taxable value of what little real property we have has evaporated.  I don’t know what it will take to convince our leaders that locally owned industry (cattle and sheep ranches) would result in much greater cash income to the county coffers.

One illustration was provided by Dr. A. L. Lesperance of Paradise Valley, NV in “Economic Importance of Livestock In Nevada’s Cow Counties” (1996) revised in 2010.  Lesperance explains that each “mother cow” or Animal Unit (AU) requires about $350 per year as operating expenses of a ranch. Other authors report annual cash expenditures from $374 to over $400 per head per year.  Mr. Fred Fulstone of Smith NV calculates that about 3.5 sheep require a similar operating cost. 

Ranch operating costs include everything from labor to veterinary supplies and other retail purchases providing cash that circulates within the local economy.  The Lesperance figure for the cost of cattle production indicates that the Nevada ranches that are left spend as much as $150,000.000 per year for cattle production and about $8,500,000 per year for sheep production.

Federal agencies have enthusiastically cut the numbers of livestock that they permit to graze on BLM and Forest Service controlled lands putting many ranches out of business.  But those lands still produce the grass and browse every year that could be consumed by livestock just as in the past.  There is a potential to restore 250,000 cattle to Nevada rangelands which would result in an additional $87,500,000 being spent by ranchers within various Nevada communities each year and restoring sheep to 1,000,000 animals would result in an additional $91,500,000 of cash circulating within the Nevada economy every year.  Our leaders can’t figure out how $337,500,000 of cash spent annually within Nevada communities can possibly be as valuable as the pittance check from the federal government that is less than 1/10 of that amount.  

Floyd Rathbun is a Certified Range Consultant and can be reached at rathbun@phonewave.net

Now, take that concept and apply it west-wide.  Then throw in timber and mining and you'll start to see how much the envirocrats are costing us each year.  This also shows the argument that states can't "afford" the cost of managing these lands is a bunch of outhouse soup. 

These folks should, in the short run,  be working with the federal agencies to bring about reasonable production on these lands.  In the long run they should be pushing to have these lands transferred to the states.  Grovelling before Congress every year for PILT funding has got us nowhere.
 

Greens fume over Obama’s bid to divert restoration funding

National environmental groups today blasted an Obama administration proposal to divert more than $3 billion in future oil and gas revenues due to Gulf Coast states to pay for land conservation, rural counties, wildlife grants, coastal restoration or other "national priorities," warning that such a move would stymie coastal restoration projects in Louisiana. The proposal tucked within Obama's $4 trillion fiscal 2016 budget request has set off a firestorm of opposition among Gulf Coast lawmakers and drew a scathing review this morning by the editorial board of the New Orleans Times-Picayune. Today it was opposed by the Environmental Defense Fund, National Wildlife Federation, National Audubon Society and Lake Pontchartrain Basin Foundation, groups that have invested heavily in restoring the eroding Gulf coastline. Other environmental groups appear ambivalent about the proposal. Numerous conservation and sportsmen's groups are pushing for dedicated funding for LWCF, but they have yet to articulate a way to pay for it. The $3 billion that would be diverted from four Gulf states -- Alabama, Louisiana, Mississippi and Texas -- would fund accounts like LWCF, which acquires and preserves lands nationwide, as well as state and tribal wildlife grants and payments in lieu of taxes (PILT), a major priority for rural counties with federal lands, but not so much along the Gulf Coast...more

Millions at stake for counties

The Washington County commissioners approved salary increases and an increase in the 2014 general fund budget on Thursday, but warned they could be facing major budget constraints depending on how Congress shapes a proposed federal budget agreement. An Interior Department program called Payments in Lieu of Taxes was established in 1976 as a way for rural counties and other local governments to offset the loss of tax revenue that comes with having large areas of non-taxable federal land within their borders. In Utah, where nearly 60 percent of the state is federally owned, the payments have been an essential part of county budgets, helping to fund law enforcement, roads and a number of other services. Nearly $9 million went to the five-county area in southwestern Utah this year. But with the end of the year approaching, local officials are getting uneasy about the program’s future. Congress hasn’t acted on payments due for the 2014 fiscal year, and while PILT is listed as a priority in the bipartisan budget agreement now awaiting President Barack Obama’s signature, Congressional appropriators would still have to actually fund the programs. The PILT program represents only a small fraction of the federal project — about $425 million is the projected spending for 2014 — but officials say it is significant for smaller governments. The federal government authorized $421.7 million in PILT payments nationwide for 2013, an amount reduced by $21.5 million due to sequestration. Most of the funding goes to smaller governments in the West...more

Has PILT ever been fully funded?

As the Obama adm. limits energy production on federal land, revenues decline causing more pressure to cut spending - like for PILT.

The best answer is to transfer these lands so they can either be managed or taxed by the states.