Friday, August 26, 2011

Should county rely on government funding?

Officials urge caution when counting on federal, state money

Express Staff Writer

Property tax is the most-talked about revenue source for Blaine County, especially with impending increases nearing 6 percent to fund the county's $26.4 million budget. But federal and state funding make up significant portions of the county's revenue as well—about $2.7 million in state funding alone, which could be at risk as early as next fiscal year.

"That's a pretty good chunk of our budget," said Blaine County Clerk JoLynn Drage. "I don't know how much to tell you we depend on it, but it's a significant portion."

According to county revenue projections, it receives non-grant state and federal funding from two main programs: Payment in Lieu of Taxes from the federal government and sales tax revenue sharing from the state.

Drage said PILT is relatively safe for the moment. The funding, more than $1.7 million, is given to Blaine County as compensation for the its not being able to collect property taxes on federal land. The money is guaranteed through fiscal 2012 due to a bill passed by Rep. Mike Simpson, R-Idaho, in 2006.

Nikki Watts, spokeswoman for Simpson, said that what will happen after 2012 is anyone's guess, especially with the debt supercommittee taking a hard look at all of the federal government's expenses.

"At this point in time, it would be hard to determine what the supercommittee is going to do," she said. "I can't predict what they are going to come up with, and there are other programs they are going to be looking at."

Blaine County receives the third-highest amount of PILT money in the state, coming in behind Cassia and Elmore Counties. According to the Idaho Department of Lands, 78 percent of Blaine County's 2,660 square miles is owned by federal agencies, making the land ineligible to be taxed by the county.

Blaine County Commissioner Angenie McCleary said earlier this month that despite recent economic uncertainty, she is counting on receiving more money from PILT in 2012 than projected—$100,000 more, which McCleary said could go toward giving elected officials the same 1 percent salary increase that other county employees are set to receive in October.

According to county budget data, Blaine County has received more than the government promised for the past three years. In fiscal 2009, the county budgeted for just over $1 million and received $2.4 million in PILT funds. For 2011, the county only counted on $1.7 million, but has already surpassed that amount, receiving over $1.8 million.

Drage said that while it is possible McCleary is correct, she can't count on anything beyond what the government is obligated to give.

"I don't think she's right," Drage said. "We got a little more last year, but all you can really count on is what you are guaranteed."

PILT future beyond 2012 is uncertain, but the current guarantee still makes federal funding far more secure than the county's state funding. Blaine County's budget projects just under 2.7 million in state funding, with $540,000 from the state revenue sharing program.

The state shares a portion of sales tax with counties based on the counties' population, meaning Blaine County received more than $530,000 so far this fiscal year.

Wayne Hammon, administrator for the Idaho Department of Financial Management, said the state's projections show a slight increase for counties.

"It is projected to go up a little, just as we expect sales to go up," he said. "Blaine County could expect to see a few thousand dollars more."

But expecting isn't getting, and Rep. Wendy Jaquet, D-Ketchum, said there has been buzz in the Legislature regarding reducing the state's contribution to counties.

"There is a recognition that people rely on this funding," said Jaquet, a member of the Joint Finance and Appropriations Committee. "[But] there's been some talk in the House about pulling some of that revenue sharing to the state to meet some of its fiscal needs."

Hammon admitted that the projections showing the increase in potential sales tax revenue were conducted in early July, before the debt-ceiling crisis, the shaky state of the stock market and the federal credit downgrade. A new revenue projection won't be available until January, far after counties set their budgets for the next fiscal year, and so Hammon said counties should be cautious when counting on state funding.

"It's a lot easier to have a surplus and have to go in and give a department extra money than it is to go in and cut," he said. "I don't think [Blaine County] should be worried, but they should be cautious."

Jon Hanian, spokesman for Gov. Butch Otter, urged even more fiscal conservatism.

"We anticipate at least a trillion dollars being cut from the federal budget, and we expect them to start by cutting the money they give to the states," he said. "We won't know until we start putting the budget together, but caution and frugality are the watchwords [for counties]."

Katherine Wutz:

Idaho wants to manage federal land

Idaho's rural counties want Washington, D.C., to let the state manage federal land to boost their finances amid threats to a program that's propped up their budgets. The Associated Press reports that the Idaho Land Board threw its support behind a pilot program to place 200,000 acres of national forests under state Department of Land oversight. For eight years, counties have been the beneficiaries of a federal law that replaced dwindling timber-sale receipts. The law sends about $13.7 million annually to Idaho, but its future is in doubt with national debt cutting a priority. Despite Idaho's support, environmental groups and others are skeptical that the federal government will turn its land over to state control.

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