Western states are unique in that for many of us, the majority of our land is owned and managed by the federal government. West of the Rockies, over 50 percent of the land is federal, while in Utah that number rises to nearly 67 percent.
Utah is faced with challenges unknown virtually to the rest of the country – artificially stagnant populations and economies in some areas of the state, hampered infrastructure development, and in many cases, the near impossibility of connection to surrounding areas and communities. Add to this the fact that the federal government has deprived states, counties, and local jurisdictions from the ability to collect ad valorem taxes on this land.
Without a property tax base, surrounding communities are deprived of money that is vital for the funding of schools, roads and public infrastructure, firefighters, police, and search and rescue programs and equipment. The financial pressures placed on these communities by visitors to public lands greatly exacerbates the already existing inequities and strains minimal budgets.
This has led to action from the Legislature to try and make these communities whole. During the 2020 Session, a bill was proposed that led to a discussion of perhaps creating a statewide sales tax earmark to help fund search and rescue operations in these tourism-heavy areas. Fortunately, the bill was amended down to provide potential credits for search and rescue insurance advertising.
In 1976, when Congress made the decision to cease what had been the policy of the ongoing disposal of public lands and hold the remainder, mostly in the west, in perpetuity, they implemented a program called Payment in Lieu of Taxes, or PILT. These yearly payments were intended to offset the disproportionate burden placed on states and communities by providing funding to replace the loss of property tax revenue from these surrounding federal lands. PILT has never done an adequate job, though these communities are necessarily dependent on the small portion they do receive. Colloquially, the program is known as Pennies in Lieu of Trillions, as only a fraction of the estimated tax that would otherwise be due on these lands is paid through PILT.
Recently, the Utah State Legislature passed a resolution based on an analysis they had commissioned, that showed Utah’s communities were receiving approximately 8 percent of the estimated tax value of federal lands in the state. The resolution calls on the federal government to fund PILT payments at the full property tax equivalency amount, and it passed unanimously in the Senate and with near unanimous support in the House.
Senator Mike Lee has been leading the effort in the Senate for years to ensure that Utah and other states are compensated fairly for the burden of federal lands in their communities. In order to further this effort, he recently introduced an amendment to the HEALS Act that would require the Department of the Interior to perform a study and develop a modeling tool to determine the actual fair tax equivalent value for all federal lands, both in Utah and throughout the country.
In Utah, where the impacts are sorely felt, this is clear to lawmakers on both sides of the political divide. When PILT was first instituted, there was really no efficient way to determine the value of over 600 million acres of land strewn across the United States, but technology has changed the possibilities. If the federal government is going to hold lands in perpetuity, it is incumbent upon them to pay the tax equivalent amount that would be required of any other landowner so that our rural communities can have the resources necessary to host the nation, and the world, on Utah’s public lands.