Utah counties are getting a record $40M from the feds to compensate for untaxed public lands — but is the funding fair?

(Francisco Kjolseth | The Salt Lake Tribune) Interior Secretary Ryan Zinke hikes along the Butler Wash Indian Ruin trail alongside Utah Gov. Gary Herbert during a tour of the Bears Ears National Monument on Monday, May 8, 2017.

Utah counties will receive a record $40.7 million through a program designed to compensate them for the untaxed public land within their borders.

Payment in Lieu of Taxes, or PILT, distributed some $553 million to states this year, helping fund basic services in largely rural counties, the U.S. Department of the Interior announced Tuesday.

“Local communities contribute significantly to our nation’s economy, food and energy supply, and help define the character of our diverse and beautiful country,” Interior Secretary Ryan Zinke said in a news release lauding the payments. “These investments often serve as a lifeline for local communities as they juggle planning and paying for basic services like public safety, firefighting, social services and transportation.”

What the release didn’t say was the payments went up only because Congress had refused to authorize payments to counties through a long-standing Forest Service revenue-sharing program, and the Trump administration is seeking to limit them in the future.

“Counties got less money than they did before,” said Mark Haggarty of Headwaters Economics, a Montana-based public-interest research group. “This isn’t better for counties. Next year, PILT will go right back down.”

And that’s a problem for rural Utah counties, whose leaders say their local tax bases are insufficient to support government services.

“Without our PILT payments, Garfield County doesn’t survive,” said Garfield County Commissioner Jerry Taylor, whose county will receive $910,000 this year. “These monies help fund roads, infrastructure, schools and education.”

PILT has distributed $8.5 billion to 1,900 local governments since its inception in 1977. It is meant to make up for their inability to tax land administered by the Bureau of Land Management, the National Park Service, the U.S. Fish and Wildlife Service, the U.S. Forest Service, as well as federal water projects and some military installations. Such lands cover two-thirds of Utah.

The Interior Department calculates each county’s annual payment by taking into account its population, the amount of federal land it has and receipts from other revenue-sharing programs, such as Utah’s Community Impact Board and Safe and Secure Rural Schools.

A closer look at payment data highlights a problem in that formula. The counties with the most public land, which have the greatest need, are not getting comparative levels of money.

San Juan County, for example, contains 3.1 million acres of public land — second only to Millard County. But because its population is just a fourth of Tooele County’s, its PILT take of $1.8 million is half that of Tooele, which has 2.1 million acres.

None of the five Utah counties with the most public lands — Millard, San Juan, Garfield, Kane and Emery, in that order — is one of the top five counties receiving PILT revenue.

Utah’s top five PILT recipients are among the state’s most populated counties, all growth magnets off the Wasatch Front. After Tooele’s $3.6 million, they are: Iron, $3.4 million; Box Elder, $3.3 million; Washington, $3.1 million; Uintah, $3.1 million.

But the key problem is the lack of year-to-year consistency in payments, which county commissioners find deeply frustrating. Overall, PILT funds have been on an upward track — Utah’s total haul in 2005 was $19.6 million — but dipped in 2013 and 2015.

According to Headwaters, this volatility undermines the value of PILT and related revenue-sharing programs. It proposes replacing this compensatory system with a special endowment funded by receipts off public lands. Such an arrangement would mirror Utah’s permanent school fund that is fed by revenues off state trust lands and whose interest yields reliable annual payments to public schools.

An endowment would guarantee all counties predictable, fair and rising payments, Haggarty testified before Congress last year.

“A permanent trust funded by commercial receipts could benefit from increased revenue from federal lands, but it would stabilize these revenue streams over time and ensure all counties fair payments even in years and in places where generating historic levels of receipts isn’t possible,” he said.

Utah narrowly remains the nation’s second-leading PILT recipient; only California, with 11 million more federal acres and 13 times more residents, received more — $60.5 million. According to Interior data, California by far saw the biggest PILT boost, exceeding $13 million this year.

This revenue stream would severely shrink overnight should Utah ever succeed in its quest to wrest title to 31 million public acres within its borders. Counties with national parks, designated wilderness and military bases would still receive some PILT because Utah is not seeking title to those lands.

Taylor, former mayor of Escalante, has long worried about the decline of resource industries around his community, which has become increasingly dependent on tourists visiting the county’s natural wonders — which include Bryce Canyon National Park and portions of Grand Staircase-Escalante National Monument and Dixie National Forest.