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Principal Deputy Assistant Secretary for Policy, Management and Budget Joan Mooney | U.S. Department of the Interior

Mooney: ‘PILT payments help local governments carry out vital services’

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Federal payments of $578.8 million will be given to more than 1,900 state and local governments under a program that helps local governments offset losses in property taxes because of nontaxable federal lands within their boundaries.

The Payments in Lieu of Taxes (PILT) program — created under Public Law 94-565 Oct. 20, 1976, and rewritten and amended by Public Law 97-258 Sept. 13,1982 — helps local governments with service, including “firefighting and police protection, construction of public schools and roads and search-and-rescue operations,” the PILT website said.

“The Biden-Harris administration is committed to boosting local communities,” Principal Deputy Assistant Secretary for Policy, Management and Budget Joan Mooney said in a June 15 Department of the Interior news release. “PILT payments help local governments carry out vital services, such as firefighting and police protection, construction of public schools and roads and search-and-rescue operations. We are grateful for our ongoing partnerships with local jurisdictions across the country who help the Interior Department fulfill our mission on behalf of the American public.”

State and local governments are not allowed to tax federal lands within their boundaries, and these payments in lieu of taxes are meant to support those entities and make them whole, or closer to, despite the financial losses they incur because they cannot tax federal lands, according to the PILT website.

The 2023 PILT document explains the “total amount of funding authorized for the FY 2023 PILT program is $579,150,177. Of this amount, $578,750,177 is for FY 2023 payments (the net of $578,894,590 total calculated payments reduced by $144,413 for FY 2022 payment adjustments), and $400,000 is for administration of the program.”

According to the release, PILT payments totaling nearly $11.4 billion were distributed to all the states, the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands since 1977. The funding for these payments comes from commercial activities on federal public lands. What doesn’t go to the states and counties goes into the U.S. Treasury to fund federal activities.

There are three categories of land that qualify for PILT funding, according to the Department of the Interior. 

The FAQ page notes these distinctions: “Federal lands in the National Forest System and the National Park System, lands administered by the Bureau of Land Management, lands in Federal water resource projects, dredge areas maintained by the U.S. Army Corps of Engineers, inactive and semi-active Army installations, and some lands donated to the Federal Government; Federal lands acquired after Dec. 30, 1970, as additions to lands in the National Park System or National Forest Wilderness Areas; and Federal lands in the Redwood National Park or lands acquired in the Lake Tahoe Basin near Lake Tahoe under the Act of December 23, 1980 (Public Law 96-586, 94 Stat. 3383).”

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