Baucus and Tester push to not delay PILT payments

Senators join bipartisan effort calling on Interior Department to release funding on time

(WASHINGTON, D.C.) – Senators Max Baucus and Jon Tester are pushing the federal government not to delay Payment in Lieu of Taxes (PILT) funding for Montana—or come up with a short-term solution to make sure counties aren’t “left with the short end of the stick.”

The Senators today sent a bipartisan letter, signed by dozens of members of the Senate and the U.S. House of Representatives, to the U.S. Interior Department, which recently announced that the funding would be released to counties later than anticipated.

“County governments, already facing a dismal economic situation, cannot wait an extra month for these funds, or simply suspend their operations for a month,” Baucus and Tester wrote in a letter to Interior Secretary Ken Salazar. “They need these funds now, simply to keep their doors open.”

“PILT is vital to Montana counties and I have always fought for this program, including passing a bill in 2008 to fully fund the program for the first time in a more in than a decade,” Baucus said.  “Any plan to delay that funding puts Montana’s rural counties in a tough spot, and it’s too much to ask as folks and entire communities work hard try to make ends meet.”

“A lot of folks across Montana and rural America rely on this important source of funding—which is only common sense in counties that have more public land,” Tester said.  “Montana’s counties need this funding on time so they can balance their books.  Any delay will leave communities with the short end of the stick, and that’s not going to fly in Montana.”

PILT is paid to counties to compensate for the presence of federal land, which cannot be taxed.  The payments are usually made by June 30, in time for the start of the fiscal year for most counties.  Most PILT funding goes to counties in western states. In 2008 Baucus wrote and helped pass a provision making the PILT program mandatory. The move guaranteed the program will be fully funded through 2012.

“At a minimum, the Department should determine if there is any short-term solution to this issue so that a payment can go out to counties this month,” Baucus and Tester wrote.

The letter appears below.

Dear Secretary Salazar:

As you know, many rural counties in the West are dependent on the funding that comes from the Department of the Interior due to the loss of potential tax revenues on federal lands, known as Payment in Lieu of Taxes (PILT).  Nearly $381 million was distributed to counties across the nation in FY2009.  This money is critical to keeping county government functioning.  Many of these counties have obligations that must be met by June 30 and these cannot be modified.

That’s why we are concerned by your department’s announcement that it will be releasing PILT funds a month later than anticipated.  County governments, already facing a dismal economic situation, cannot wait an extra month for these funds, or simply suspend their operations for a month.  They need these funds now, simply to keep their doors open.  We urge you to issue these funds at their previously scheduled release date.

While we understand that the PILT formula is complicated, it is critical for rural governments that the Department of Interior expedites the release of these funds as quickly as possible.  If the Department can only estimate payments at this time because of difficulties in determining the final payment amount, we urge you to consider providing estimated payments that can be adjusted later so that our rural counties are not left stranded while this is resolved.  At a minimum, the Department should determine if there is any intermediate solution to this issue so that a payment can go out to counties this month.  Additionally, we encourage your department to provide appropriate outreach to the communities depending on these funds.

Thank you for your understanding of the importance of this request.  We look forward to your prompt attention to this matter.

Sincerely,
(s)
Max Baucus
Jon Tester
Et al.