$228 Million Paid to County Governments as Compensation for Lost Taxes on Federal Lands

Source: U.S. Department of the Interior, Press release, June 12, 2008

Secretary of the Interior Dirk Kempthorne announced today that local governments with tax-exempt federal land in their jurisdictions will receive $228.5 million this year in compensation for forgone tax revenue.

Under the federal Payments in Lieu of Taxes (PILT) Program, the money is distributed to about 1,850 county and other local governments around the nation to help pay for essential services, such as firefighting and emergency response and to help improve school, road and water systems.

The Department of the Interior annually collects about $4 billion in revenue from commercial activities on federal lands, such as livestock grazing, timber harvesting, and oil and natural gas leasing. Some of these revenues are shared with states and counties in the form of revenue-sharing payments. The balance is deposited in the U.S. Treasury, which in turn pays for a broad array of federal activities, including annually appropriated PILT funding to counties.

Eligibility for PILT payments is reserved for local governments (usually counties) that contain nontaxable federal lands and provide government services related to public safety, housing, social services, transportation and the environment.

By law, the payments are calculated using a mandated formula, based on the number of acres of federal entitlement land and the population within each county or jurisdiction. These lands include the National Forest and National Park Systems, National Wildlife Refuge System as well as lands managed by the Bureau of Land Management and those affected by U.S. Army Corps of Engineers and Bureau of Reclamation water resource development projects, and others.

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