Proposed Trump budget reduces PILT
Tuesday, April 18, 2017 1:00 AM
Communities that helped get President Donald Trump elected could be the hardest hit by some of his proposed budget cuts to programs like Payment in Lieu of Taxes, Community Development Block Grants and USDA loans that have benefited rural areas including Lovelock and Pershing County.
County Commissioner Rob McDougal said more difficult decisions could be made over which programs and projects get funded if payments decline.
Until the annual check arrives, county officials are never sure how much PILT will be approved by Congress. County Auditor/Recorder Rene Childs said this year's payment is still uncertain. Last year's payment of more than a million dollars came in handy when parts of the budget needed augmentation.
“We expect it in the latter part of June and I don't know how much that is going to be,” she said. “It's used to supplement other funds. If other funds are low, PILT is transferred to cover those shortages.”
If future PILT payments to the county decline, discretionary spending must be adjusted accordingly, said County Commissioner Rob Mcdougal. That could mean some difficult decisions over which community programs or projects not related to public safety or essential services should be cut.
“Cutting all or part of the PILT funding is not helpful,” Mcdougal said last week. “It is important to know though that PILT funding has never been guaranteed year after year although we generally anticipate about $1,000,000 per year based on the last several years. These moneys are directed (by the county) as needed and as is legally and practically appropriate.”
The PILT payment to Pershing County for fiscal year 2016 was $1,079,562, $977,138 for FY 2015 and more than $2.7 million for FY 2014. A potential ten percent cut in annual PILT payments means around $100,000 less would be paid by Congress to compensate Pershing County for the 2.9 million acres of federal public land managed by the BLM that cannot be taxed by the county.
Less PILT would make an already tight county budget even tighter with less funds available as needed for the senior center food program, county library, cemeteries and other services in Pershing County.
Even if future PILT payments decline, County Commissioner Larry Rackley said he would protect the library and senior center services but was not sure what budget cuts would be any easier to make.
“I would not go after the library or the senior center,” he said last week. “I have no idea for sure what would be cut. You can't do that until you know what (PILT payment) they are going to send you.”
PILT payments are calculated annually according to each county's public land acreage and population.
For the 2016 fiscal year, Pershing County's latest payment of $1,079,562 on 2,919,284 acres of public land amounted to about 37 cents per acre. Humboldt County received a PILT payment of $1,729,428 or 34 cents per acre of public land and Lander County got $982,774 or 29 cents per acre for FY 2016.
Washoe County was paid $3,470,890 for 2,931,912 acres or about 84 cents per acre of public land while Clark County got $3,369,095 or almost 70 cents per acre of public land. Storey County scored the highest per acre PILT payment rate in the state of Nevada at $2.60 per acre of public land.
In Pershing County, $163,000 of the 2016 PILT payment was transferred to the senior citizens fund, $20,000 to the library fund, $10,000 to the cemetery fund and $1,091,469 went to the general fund.
Some believe PILT payments are inadequate compared to the property tax revenues counties could earn if public land was transferred to county control and was potentially leased or sold to private interests. But, Rackley said he was not ready yet to trade PILT for vacant land that may or may not attract buyers.
“That takes a lot of discussion,” he said. “For one thing, how do you get that (tax revenue) with no one ready to buy the land right now? How do you get the money we would be giving up on the PILT side?”
A March 22 letter to the Senate Appropriations Committee, signed by 32 senators including Republican Senator Dean Heller and Democratic Senator Catherine Cortez Masto, asks for full PILT funding now and in the future. In response to Reno Gazette-Journal reporter Benjamin Spillman, a statement from Heller's office called PILT “an obligation the federal government has to any county with public lands.”
“Since coming to Washington, I've stood up for the PILT program because I know how important it is to Nevada's delivery of essential services including law enforcement, education and road maintenance.”
Heller says he also supports the Pershing County Economic Development and Conservation Act. The federal legislation, back on the table after it died in last year's Congressional session, would streamline public land transfers to the county and public land sales to mining, ranching or other interests.
Budget cuts proposed by the Trump administration would reverse an Obama decision to increase PILT.
According to a Department of the Interior statement in June, 2016, $451.6 million distributed last year to 1,900 local governments was “the largest amount ever allocated.” The DOI oversees annual PILT payments intended to compensate counties for federal public land not on the local property tax rolls.
Minimum annual PILT funds of at least $480 million proposed last year by the previous administration were intended “to ensure funding stability for the program and local communities year after year.”
“It's one of the ways the federal government can fulfill its role of being a good neighbor to local communities,” said former DOI Secretary Sally Jewell. “President Obama has made job creation and opportunities in rural areas a top priority and has fought for continuing the PILT program.”
Block grants on chopping block
The proposed Trump budget includes elimination of the Community Development Block Grant program run by the Housing and Urban Development Administration and cuts to the USDA's rural development loan program. CDBG revenues have funded local city and county projects like sewer plant upgrades and a new fire house that was an essential for the Imlay Volunteer Fire Department.
Lovelock Mayor Mike Giles would prefer greater oversight and tougher qualifications for block grants rather than complete elimination of the CDBG program as proposed by the Trump budget team.
As with PILT, Congress should have the final say on the CDBG program as well as future USDA loans. A USDA loan helped the city of Lovelock finance a new, more energy-efficient public works building.