I'm grateful to the Asheville Citizen-Times for publishing my op-ed on PILT in the Sunday paper on February 6, 2022. Here it is:
When I ran for Congress in 2020, I talked regularly about PILT (Payment in Lieu of Taxes). PILT is a Department of Interior program that Congress created in 1977 to compensate local governments for the presence of nontaxable federal lands in their jurisdictions. In 2021, PILT paid $529.3 million to over 1,900 local governments around the country, mostly counties.
When someone says $529.3 million, it sounds like a lot of money – and it’s certainly nothing to sneeze at – but it’s a modest sum in the context of federal spending: If you want to see a real waste of the taxpayers’ money, look at the $540 million a year we spend to keep 39 detainees at Guantanamo Bay. It also looks more reasonable when you consider that the federal government generates about $5.7 billion a year from fees for recreational use, drilling and mining, timber harvesting and livestock grazing on federal lands.
Fifteen of the 17 counties in the 11th District receive PILT payments: Polk and Rutherford are the exceptions. The 15 counties received a total of $3,521,816 in 2021, with Henderson County getting the least at $55,387 and Swain County getting the most at $689,189. The payments are for more than 1.15 million acres of nontaxable federal land in Western North Carolina and reflect an average payment of just over $3/acre. The amount each county receives is based on a complex formula that considers the number of acres of eligible federal land, a population-based payment ceiling, prior-year payments, state pass-through laws, and the inflation rate.
There were three specific areas of the PILT program I had hoped to address in the 117th Congress.
First, funding for PILT is inadequate and should be increased. Forty-seven of North Carolina’s 100 counties received a total of $4.9 million in PILT payments in 2021. As a basis for comparison, each one of the 39 Guantanamo detainees costs the taxpayers 2.5 times that amount for the same period. Close the detention camp at Guantanamo, send the detainees to the federal supermax prison, and Congress could double the amount it spends on PILT and save the taxpayers several million dollars a year. Efforts to increase PILT payments can be bipartisan. Last spring, Republican Senators Jim Risch, Mike Crapo, and Mike Lee, and Rep. Lauren Boebert, introduced the More PILT Act – Making Obligations Right by Enlarging PILT Act – in the Senate and the House. As Senator Lee said at the time, PILT payments are “woefully inadequate” and should be increased to “more accurately reflect the lands’ value.”
Secondly, the payment formula should include a poverty rate component since not all PILT-eligible counties are equal. I used to live in Prince William County, Virginia, an affluent D.C. suburb. It and our own Mitchell County each has about 19,500 acres of nontaxable federal land. In 2021, Prince William County – where the Census Bureau reports the poverty rate is 4.9% and the median household income is $107,132 – got $66,361, while Mitchell County – where the poverty rate is 14% and the median household income is $46,103 – got $55,786. A little more funding for places like Mitchell County would help and a little less for places like Prince William County wouldn’t hurt.
Finally, Congress should make PILT a mandatory multi-year appropriation to provide local governments more stability in their budgetary planning. At present, PILT depends on annual appropriations. Some years funding comes through discretionary appropriations, and other years it comes through mandatory appropriations, and some years the appropriated amount meets the authorized funding level and in others the appropriated amount falls short and requires a pro-rata reduction in payments. The net result is uncertainty from year to year. That makes long-range planning difficult, and it’s a problem here in North Carolina where state law requires counties to prepare two-year budgets. A three-year or five-year permanent appropriation would provide local governments more certainty and better equip them to develop and manage their budgets.
There are two things WNC knows for sure: We’ve got a lot of federal land, and we’re behind in many important areas. Programs like PILT are not a panacea, but they help. In December, Madison Cawthorn voted against the bill that funds PILT, just as in November he voted against the bill that funds the Secure Rural Schools program that provides over a million dollars a year to counties in our area. I’m hopeful we’ll do better when we elect a new representative in November; a legislator devoted to WNC interests, not an agitator devoted solely to his own self-interest. Whoever we elect should make PILT reform a priority.
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