U.S. budget stalemate hits counties

Tax payments for U.S. lands remain in limbo until approval

A stalemate over the 2014 federal budget is impacting operating budgets for Western Slope counties with a lot of public land.

For the first time since its inception in 1976, payments in lieu of taxes, or PILT funds, have not been earmarked for distribution to counties for the fiscal year.

The PILT program provides payments to counties and other local governments to offset losses in property tax revenues due to the presence of tax-exempt federal land in their jurisdictions. The federal obligation helps to fund local services from law enforcement and social services to education and infrastructure.

"If we miss out on the payment, it would mean across-the-board budget cuts for all departments," said Montezuma County administrator Melissa Brunner.

In 2013, Montezuma County received $159,950 from the program, calculated from a federal public land area of 480,749 acres. After cuts from sequestration, the county is authorized to receive $164,243 in PILT funds for fiscal year 2014 if a federal budget is passed, Brunner said.

Dolores County received $140,127, and La Plata County $607,959 from PILT payments in 2013.

Congress has not allocated the $410 million in authorized PILT funding for 2014, which is a concern for counties that have begun the budget process for next year, said Ryan Yates, legislative director for the National Association of Counties, a lobby group.

"Because of partisan issues, Congress has slowed down the pace of work, and it is affecting programs like PILT that have not been historically controversial," Yates said. "The 2014 budget proposals between the House and Senate are billions of dollars off, so there is a lot of fiscal uncertainty."

PILT payments are authorized under the Department of Interior but because there is no omnibus federal budget, the money cannot be allocated, Yates said.

Rep. Scott Tipton (R-Cortez) is part of a coalition of 47 members of Congress urging that funding be allocated for the PILT program.

In a Nov. 21 letter to the budget conference committee, the group emphasizes the program's importance.

"The inability for counties to collect these local taxes on the extensive acreage of federal lands in their jurisdictions poses a significant burden," the letter states. "And a fully funded PILT program helps to offset the loss of these critical revenues."

About 1,850 counties in 49 states depend on a PILT disbursement. Last year, Colorado counties received $31.9 million in PILT funding.

Tipton chief of staff Nick Zupancic explained that the PILT program has been historically underfunded.

"In 2008, legislation was signed into law making funding for the program mandatory for five years, so it would not be subject to annual discretionary appropriations that fluctuated more," Zupancic said. "Unfortunately, the mandatory funding requirement sunset, and counties received their last disbursement in June 2013."

Until a budget is passed, PILT payments are in limbo.

"It is not a question of whether we need the program, the question is how do we pay for it," Yates said. "PILT impacts counties and the communities we represent and serve."