Friday, April 5, 2013

County to lose $87K in federal PILT funds

Sequester forces cuts by Interior Department

Express Staff Writer

Blaine County is set to lose $87,000 in federal funds that it was counting on for this year’s budget, and county officials say what happens next year is anyone’s guess.

Outgoing Secretary of the Interior Ken Salazar sent a letter to county commissioners across the nation on March 6, stating that Payment in Lieu of Taxes (PILT) funds would be cut by 5.1 percent as a result of wide-ranging federal budget cuts known as the sequester.

PILT funds come from the federal government as compensation for counties’ not being able to collect property taxes on federal land. According to the Idaho Department of Lands, 78 percent of Blaine County's 2,660 square miles is managed by federal agencies. Last year, the county received about $1.75 million in payment.

Blaine County Clerk JoLynn Drage said the county’s July check from the federal government would be short by $87,000, a significant chunk of the county’s budget.

“We budget as precisely as we can,” Drage said. “We’re talking about a fairly large budget [about $27 million], but it’s quite a hit.”

Blaine County has not been the only county hit by the PILT reduction. The Associated Press reported last week that many timber communities have been asked to return already-disbursed PILT funding. 

Bob Rolston, commissioner of Sheridan County in Wyoming and president of the Wyoming County Commissioners Association, told the Associated Press that commissioners across the state were concerned about losing PILT funds, which amount to 25 percent of the annual budget in some counties.

“These are taxes that are due to the counties from the federal lands that lie within those counties,” he said. “The way we look at it, if you don't pay your taxes, the sheriff's going to sell your property on the courthouse steps. They seem to think they don't have to pay the taxes, and that's the way it goes.”

Blaine County Commissioner Larry Schoen said the cut in PILT funding for Blaine County was less than he had expected.

“I’m not saying it’s not significant, but we’re prepared for something of that magnitude,” he said. “If things are tight in other areas, we would have to take it out of reserves, but that’s one of the purposes of having reserves.”  

Drage said she would analyze the budget to see if any revenues exceeded expectations this year, such as the state sales tax.

“I don’t know if they will make up for that shortfall or not,” she said.

If not, Drage said, then department heads would be asked not to spend more than is absolutely necessary—but budget decisions ultimately fall to the county commissioners.

Both Drage and Schoen said they could not be certain what the PILT picture would look like for next year, and Salazar’s letter gives no hint. But Schoen said he believes cuts to PILT funding are only one small part of larger austerity measures that he does not think will be reversed any time soon.

“I believe that we’re entering a new era,” he said. “Those types of spending decisions at the federal level are just beginning.”

Schoen also pointed to the Idaho Legislature’s recent resolution asking Congress to transfer all federal lands to state control, with similar measures introduced in Nevada. Schoen said that if such measures are successful, the future of the PILT program would be uncertain.

“We really need to be prepared for these kinds of changes,” he said. 

Kate Wutz:

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