Missoulian: Congress: Lock in full PILT funding by Christmas

Montana’s congressional delegation is joining with dozens of other U.S. senators and representatives in urging their leaders to figure out quickly how to fully fund a program that supplied more than $29 million to Montana counties this year.

Payments In Lieu of Taxes help offset losses in property taxes because of nontaxable federal lands: national forests and parks, as well as Bureau of Land Management and Fish and Wildlife Service lands. The U.S. Department of Interior estimates it’ll take $452 million to fully fund it in the nearly 1,900 affected counties across 49 states.

U.S. Sens. Steve Daines, R-Mont., and Jon Tester, D-Mont., joined 33 fellow senators in signing a letter sent Friday to Majority Leader Mitch McConnell, R-Ky., and Minority Leader Harry Reid, D-Nev.

U.S. Rep. Ryan Zinke, R-Mont., is among those signing onto a similar letter going to House Speaker Paul Ryan and Minority Leader Nancy Pelosi.

Both letters stress the need for timely action to give counties “the certainty they need to plan their own budgets and continue providing essential services,” the Senate letter said.

“They’re basically asking for PILT funding to be included in must-pass legislation by the end of the year,” Tester spokeswoman Marnee Banks said Monday.

It could come as early as next week, when Congress is expected to pass the first long-term highway bill in a decade. Or it might be in one of several appropriations bills or an amalgamation of all of them. Congress is charged with passing appropriation bills before adjourning for Christmas on Dec. 11.

All but one of Montana’s 56 counties receives PILT funding. The exception is Daniels County, county seat Scobey, on the Canadian border in eastern Montana.

It’s an especially important revenue source in forested counties. In fiscal year 2015, Flathead County received a state-high $2.4 million, nearly $1 for each of its 2.44 million acres of federal land. Lewis and Clark County was close behind at $2.34 million, followed by Ravalli County at $2.1 million, Missoula County at $1.65 million and Gallatin County at $1.6 million.


Daines called PILT funds a “lifeline” for many Montana communities, in particular those that “have suffered from severe economic challenges due to declining timber harvests and natural resource production.”

The payments go hand in hand with federal Secure Rural Schools funding, which is designed to make up the shortfall for diminished timber production on federal lands. Thirty Montana counties are funded by both.

Whereas SRS money is directed to road departments and rural schools, counties use PILT funds in any way they see fit.

More than 10 percent of Ravalli County’s $19.8 million operating budget comes from Payments In Lieu of Taxes, according to chief financial officer Klarryse Murphy.

Of the $2.1 million in PILT funding, $908,000 goes to public safety and another $700,000 to the general fund, where it’s shared by 10 departments ranging from the commissioners’ and county attorney’s offices to a public health nurse and the office of emergency management.

Salaries make up 80 percent of the Ravalli County budget, Murphy said.

“Bottom line is if PILT goes down, the commissioners have said they’ll have to lay people off. What else can you do?” she said.

Banks said Tester has introduced legislation that would reauthorize SRS for three years and establish permanent full funding for PILT “so we don’t have to have this annual fight.”

That bill’s fate is still up in the air, she said, but it’s addressed in both the Senate and House letters with similar wording. 

“Moving forward we hope Congress can work together to enact a fiscally responsible long-term sustainable solution to fully fund this important program and eliminate the ongoing funding uncertainty PILT counties face,” the Senate letter said. “However, as the end of the year approaches, enacting full funding for … FY 2016 is essential in order to provide counties with the certainty they need to plan their own budgets and continue providing essential county services.”


Sparsely populated Lincoln County, which has one of Montana’s highest unemployment rates, depends on the federal payments more than most. Nontaxable federal lands comprise nearly 80 percent of the county’s land base.

“We really do appreciate the efforts from Sens. Tester and Daines and Rep. Zinke as well,” Lincoln County Commissioner Mark Peck said. “All three of them are pretty much arm-in-arm in this thing.”

PILT funding is intended to compensate counties for the cost of infrastructure and services on their federal lands. It’s based on a complex formula that takes into account eligible acreage but also the Consumer Price Index, population, and payments in past years and from other specific programs.

Lincoln County has some 1.7 million acres of federal land. In Montana, only Flathead County, with its 2.4 million acres, and Beaverhead County, with 2.05 million acres, have more.

Still, his county’s most recent PILT payment was a comparatively small $628,000. Peck said it’s ironic but that might reflect the frugality of past commissioners who used PILT money to build up reserve funds when the timber industry flourished.

“It’s just one of those situations where when this was all set up and the forest was productive, everything was good,” Peck said. “But if the forest isn’t productive it’s not good. The formula’s not worth a hoot.”

“That’s a pretty big swack of land to be taken out of your ability to assess or for anybody else to develop on,” he added. “It really limits our ability as a county for any type of self-determination.”