Rural counties to lose the most from defunded lands programs

What happens to local budgets when Congress stops these federal payments.

 

For the past several years, funding for the two largest programs that compensate county governments for their federal lands has been in limbo. Payments have shrunk, and one program has been defunded completely. That’s hurting rural communities—especially in the West where the vast majority of public lands exist. In the coming years, lapsed federal funding may also change resource management practices as communities look for new revenue streams.  

Graph by Sarah Tory. Data compiled by Headwaters Economics.

In 1908, the government began giving counties with national forest land a portion of the logging receipts from that land. Those payments evolved into today's Secure Rural Schools and Community Self Determination Act (). The second federal program, Payments in Lieu of Taxes (), helps compensate counties with a high percentage of non-taxable federal land for lost property taxes. The two programs often make up a significant portion of county and school budgets, particularly in rural counties.

PILT, which first passed in 1976, is calculated based on a per-acre fee that’s adjusted annually for inflation. This year it’s $2.58 per acre. The formula also takes into account timber sales, grazing and recreation activity, as well as population, so more populous counties receive more money, up to a point. SRS was established in 2000 to compensate counties for falling timber harvests. The program later changed to include acreage and per capita income. That way, counties would have steady federal payments, regardless of the timber boom and bust, and counties without high-value timber would also receive compensation for federal lands within their borders. 

But the formulas act more like guidelines than requirements, since Congress ultimately decides each year how much to pay counties. As part of Republicans’ longstanding effort to cut funding for federal programs, Congress doesn’t want to continue making those payments. Although PILT is permanently authorized, since 2012 Congress has  funded it only for one year at a time. SRS is even worse off: It’s not permanently authorized, which means it’s more vulnerable to political whims and will expire in October, with no guarantee Congress will re-institute funding.

The uncertainty means that rural counties are stuck in an ongoing funding battle that makes it increasingly difficult to make long-term budget plans. Last year PILT and SRS provided $782 million in federal land payments. Without reauthorization of SRS, that number will fall to $505 million.

Graph by Sarah Tory. Data compiled by Headwaters Economics.

Part of the challenge is that counties with a long history of receiving high federal land payments tend to have created lower local tax rates as a result. And many states have restrictions on how quickly counties can raise taxes to make up for the lost land payments. In Custer County, Idaho, that amounts to a nearly 60 percent decline in the local budget. In Idaho County, Idaho, it’s over 40 percent and in Catron County, New Mexico, it’s over 30.

Some rural counties are already pressuring Forest Service managers toward bigger timber harvests to make up for the lost income. This new reliance on natural resource production will likely make revenue more volatile and less predictable as timber sales ebb and flow with market conditions. And it affects the kinds of economic opportunities available in these places.

For instance, if local governments receive the majority of their land payments from supporting extractive industries, it forecloses a lot of other economic opportunities that these rural areas could develop, says Mark Haggerty, a policy analyst at , a Bozeman-based progressive think tank. He thinks the key to successful federal lands payments will be a program that rewards counties for a range of activities on public land that contribute to the economy—from creating new wildernesses to attract tourists, to restoring fisheries and building recreational trails. 

could help close the economic gap between places like Gallatin and Beaverton Counties in Montana. Gallatin gets only 2.6 percent of its budget from federal land payments, while in Beaverhead, it’s over 16 percent. As the payment programs currently stand, if SRS isn't authorized for next year, PILT payments will get a boost of $271,000 to offset most of the SRS loss. Beaverhead County, however, will have a tougher time. Because of the population limit in the PILT formula, the county will not be able to recoup the $1.2 million loss in SRS dollars.

Here’s a look at which places will be hit hardest by the expiry of SRS, and PILT, if Congress doesn’t move to fund it again after this year:

Total current federal land payments to counties:

Counties with a lot of public land within their borders typically have high SRS and PILT payments. Traditionally high-value timber areas, like southwest Oregon and central Idaho, receive the most.

Percent of current county budget made up by federal land payments:

Sparsely populated counties that have historically received high payments, for instance southern Oregon, central Idaho and western Montana, rely most heavily on SRS and PILT. For urban counties, the federal land dollars are far less important, since those governments have a larger tax base to draw on.

Projected change in payments to counties if SRS not reauthorized:

Overall, rural counties would lose a disproportionate share of federal land payments, and would feel the effects more acutely.

Sarah Tory is an editorial fellow at HCN. 

Maps courtesy of Headwaters Economics.

NewTowncarShare News Classifieds
  • 1400 sf of habitable space in a custom-designed eco-home created and completed by a published L.A. architect in 1997-99. Nestled within its own 80-acre mountain...
  • We are hiring a Wyoming Conservation Associate Full time, competitive pay and benefits. Location: Cody, WY (preferred), Jackson, WY, or Lander, WY Visit www.greateryellowstone.org/careers for...
  • The National Parks Conservation Association, the nations leading national park advocacy organization, seeks a Regional Director to lead and manage staff for the Southwest Regional...
  • This newly created position with The Nature Conservancy's Colorado River Program will play a key role in the development and implementation of strategies to achieve...
  • The Foundation NoVo Foundation acts from the original meaning of philanthropy: the love of humanity. The Foundation is dedicated to catalyzing a global social transformation...
  • A new generation of monkey wrenchers hits the Front Range?
  • The Tanner Humanities Center and the Environmental Humanities Program of the University of Utah seek an environmental writer to offer classes in Utahs Environmental Humanities...
  • The Wilderness Society works to protect Wildlands and inspire Americans to care for our public lands. We seek to hire a strategic, experienced leader who...
  • The Idaho Conservation League (ICL) seeks an individual to lead this 45-year-old organization as executive director, to carry on ICLs work as Idahos leading voice...
  • 2+ acres, 400+ feet on Snake River, 2800 sf residence, NWF-certified wildlife habitat, excellent hunting, fishing, birdwatching, stargazing, sunsets & panoramic views. In the heart...
  • Guardians is expanding and looking for a few great people to join us in protecting and restoring the wildlife, wild places, wild rivers, and health...
  • Organic grocery/cafe at Glacier Bay needs a vibrant leader. Love good food, community, and Alaska? Join us!
  • Ouray County, Colorado, a popular tourist destination, has dramatic mountains and amazing winter ice climbing. Challenging terrain and high altitude can push visitors to their...
  • National conservation organization seeks a regular, full-time California Program Associate-Tahoe Area. Position works closely with California-based program staff and National Forest Foundation staff to provide...
  • National conservation organization seeks a regular, full-time California Program Coordinator-Tahoe Area. Position works closely with California-based program staff and National Forest Foundation staff to provide...
  • National conservation organization seeks a regular, full-time California Program Manager-Tahoe Area. Position works closely with California-based program staff and National Forest Foundation staff to provide...
  • National conservation organization seeks a regular, full-time California Program Associate-Southern CA. Position works closely with California-based program staff and National Forest Foundation staff to provide...
  • Collector's Item! The story of barley, the field crop. 50 years of non-fiction research. www.barleybook.com
  • Colorado Canyons Association (CCA) is a growing nonprofit organization fostering community stewardship of our National Conservation Lands with a focus on Dominguez-Escalante, Gunnison Gorge and...
  • Colorado Canyons Association (CCA) is a growing nonprofit organization fostering community stewardship of our National Conservation Lands with a focus on Dominguez-Escalante, Gunnison Gorge and...