When the U.S. government began to restrict uses of federal lands instead of selling or conveying them to states and homesteaders in the early 1900s, Congress created several programs to share revenues from commercial operations on public lands, such as logging and mining, as the “spoonful of sugar” to get Western states on board. But these programs quickly became too volatile and inequitably distributed, and in 1970 a federal report recommended scrapping this patchwork of programs with the simpler design of PILT.
Unfortunately, PILT has become just as inequitable and unpredictable as those early programs, leading some county officials and state lawmakers to call the program “pennies in lieu of trillions.” In some places, like the 11 adjacent Western states that contain 46 percent of all federal lands, these issues are pressing enough that PILT’s problems undermine support for federal lands and reinforce the view that the federal government is simultaneously overregulating and underserving rural communities. As PILT hits its 50th year, Congress needs to reform the program so it finally fulfills its original goal of providing fair compensation for federal land ownership.
PILT has two fundamental problems: First, the program is highly unpredictable and relies on an inefficient formula to calculate annual payments. Because Congress debates nearly every year whether to slash the program entirely, PILT payments are far too unreliable for counties to place any trust in the federal government’s continued contributions.
Meanwhile, the obscure formula designed to capture hypothetical foregone property taxes relies on seven complex and changing factors, including a population-based cap. This ceiling creates an urban bias so that the many counties with a high percentage of federal land receive disproportionately low payments. For instance, the standard PILT payment was $3.15 per acre in 2023, but Garfield County, Utah, home to much of the Grand Staircase Escalante National Monument and parts of three national parks, received only 38 cents per acre.
The PILT formula also fails to consider the lack of other sources of county revenues. For instance, Deschutes County, Ore., whose residents enjoy the state’s highest per capita incomes, receives almost 20 times the PILT payment that Hinsdale County, Colo., receives, but this makes up less than 1 percent of Deschutes’ operating budget. In comparison, Hinsdale County relies on PILT for roughly 8.5 percent of its annual budget. That’s because, as one county administrator put it, “we don’t have multimillion-dollar homes, huge ranches, ski resorts, big-ticket items that would backfill the budget like other towns in the West.”
Second, although the federal government acknowledges that a key part of PILT’s purpose is to ensure local “support” for federal lands, the program’s design fails to recognize that federal lands not only eliminate part of a county’s tax base but also part of a county’s ability to provide input on local land management. Multiple western county officials have expressed frustration that members of Congress from the East Coast have “no clue” how big their counties are, leading to their failure to consider and respond to local interests.
Garfield County and 10 other counties from rural Utah target this information gap by annually paying for flights for staffers from the congressional natural resources committees to see how federal land policies impact these rural communities. In contrast, officials in Deschutes County and Blaine County, Idaho, despite sitting on opposite sides of the partisan divide, both described satisfaction with the PILT program overall after participating in collaborative management efforts with federal employees. PILT and other federal land payments programs have never explicitly attempted to compensate for the emotional burden of the loss of local control, but the historical context of these policies demonstrates that they were almost certainly intended to do so.
To address the first fundamental flaw — the volatility and inequity of PILT payments — Congress should commit to funding PILT as a permanent program and eliminate the population cap in the formula for annual payments in favor of considering how much counties actually rely on federal funding. For example, Garfield County has less than 10 officers to patrol a land area larger than Connecticut, while Hinsdale County struggles to maintain the miles of county roads that provide access to the 96 percent of the county made up of federal lands.
The PILT formula must be changed to acknowledge the lack of other sources of county revenue and to address the actual burdens created by federal lands. These changes could ensure that search and rescue efforts in Garfield County would no longer have to rely on volunteers and that roads in Hinsdale County would be repaired each year, resulting in massive changes in the way these counties engage with their federal lands.
PILT’s reform should also be paired with a rollout of policies of collaborative management to satisfy the immense desire of counties to be able to provide input on federal decisions affecting their budgets and land use. By hearing counties’ concerns and reforming PILT accordingly, Congress has the opportunity to redefine the federal-local relationship in rural communities, build trust and improve the way these counties interact with their federal lands.
Alyssa Florack-Hess is an attorney at Dorsey & Whitney LLP whose practice focuses on natural resources and local land use. She advises on matters related to the National Environmental Policy Act, the Federal Land Policy and Management Act, wildlife protection, conservation easements and local land use law.
Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.
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