Wednesday, May 23, 2012

County could lose $1.75M in PILT funds

Congress poised to de-fund long-standing program

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By KATHERINE WUTZ
Express Staff Writer

Sen. Mike Crapo

Blaine County is on the verge of losing more than $1.75 million in annual federal funding unless an amendment that would fund a program for counties with public land is added to a federal transportation bill.

Each year, Blaine County receives some $1.75 million in funding from the Payment in Lieu of Taxes program, or PILT.

The PILT funds are given to Blaine County as compensation for its not being able to collect property taxes on federal land, and were originally funded by the proceeds from harvesting timber.

According to the Idaho Department of Lands, 78 percent of Blaine County's 2,660 square miles is owned by federal agencies.

The county was guaranteed PILT funding through fiscal 2012, and was looking forward to the five-year extension of PILT introduced by Sens. Jim Risch and Mike Crapo, both R-Idaho, last year.

The extension was attached to a federal surface transportation bill in the Senate—but not in the House, which could result in the county losing that funding if the Senate and House conference committees can't reach a deal.

"They're trying to sort out the differences," said Lindsay Nothern, communications director for Crapo.

So far, the senators have already compromised, cutting their proposed five-year extension to one year, but Nothern said that might not be enough for other Republicans in Congress who are eager to cut spending.

According to the Department of Interior website, PILT costs the federal government approximately $157 million per year.

While Blaine County gets only a fraction of that, County Clerk JoLynn Drage said the loss of PILT revenue would be "devastating" for the area. PILT accounts for about 9 percent of the county's general expenses budget.

When asked about the impact of lost funding on the county, Drage said, "If I just start crying, does that give you some idea?"

"I can't even imagine how we could begin to work with that," she said. "If they cut it in half, I still don't know. It would be devastating not only to us, but also to other counties. It would be a huge loss."

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Drage said options for recovering the potential loss in revenue are limited. By state law, the county can only raise property tax revenue by 3 percent per year.

"I don't know of any way we can make it up," she said. "You can't raise [building and other] permit fees enough to fix that, and you wouldn't if you could."

Custer County also faces loss

Custer County might be in even more trouble, as the more than $687,000 it receives from the federal government is more than 20 percent of its discretionary budget.

Custer County Clerk Barbara Tierney said the county had been setting aside most of its PILT funding for a replacement county jail.

"It would be much more difficult to make that happen," Tierney said. "It would mean some cuts."

Why would congressional representatives cut PILT funding? Apart from simple budget reduction, Risch spokesman Brad Hoaglun said it comes down to where congressmen hail from.

"It's a Western issue," he said. "The Eastern states don't have this issue of having huge tracts of federal land. It's money going someplace that they want to go somewhere else."

However, Nothern said he's optimistic the Western counties would not see a loss of funding.

"The Western senators are really united here," he said. "We've been down this road before, and every time it's looked like it's pretty bleak and at the end there's a breakthrough."

Hoaglun said a resolution could be reached by early next month—in time for counties to account for a loss in their budgeting process.

Katherine Wutz: kwutz@mtexpress.com

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