September 8, 2018 - Remarks by Congressman McClintock regarding Payments in Lieu of Taxes (PILT).

National Association of Counties 
September 6, 2018

When we talk of PILT funding, we should never lose sight of the fact that it is a very, very poor substitute for revenues generated locally by healthy economic activity and federal revenue sharing.  Our ultimate objective should be not to institutionalize PILT, but to restore active management of our federal lands and a healthy balance between federal land ownership and productive private ownership of the lands within each county in the nation.

My congressional district is in the heart of the Sierra Nevada of California.  It once enjoyed a thriving economy based on sound forest management on the federal estate.  

The sale of excess federal timber provided a steady stream of revenues to local governments as 25 percent of the proceeds went to the local governments affected.  In addition, a thriving timber industry – including 149 saw mills in our state -- provided both direct jobs and spin-off jobs which meant higher sales and property taxes to local governments and higher income taxes to the state government.  

Proper management of the forests also meant a healthy forest environment, as we could match timber density to the ability of the land to support it.

But 45 years ago, laws were enacted that have made the management of our forests all but impossible.  We have seen an 80 percent reduction in timber harvested out of the federal forests and a concomitant increase in acreage destroyed by forest fire.  Of the 149 saw mills operating in California in 1981, only 27 remain today.

PILT is a very poor substitute for this economic activity and revenue sharing.

The second issue is the disproportionate size of the federal estate in many counties throughout the West.

The federal government owns just 7/10ths of one percent of the State of New York.  It owns just 1.1 percent of the State of Illinois.  It owns just 1.8 percent of the State of Texas.

But then go further west and you will see the problem.  The Federal Government owns and controls 62 percent of the state of Alaska, 2/3 of Utah and 4/5 of the state of Nevada.  It owns nearly half of my home state of California.  In one county in my district – Alpine County – the federal government owns 96 percent of the land.  

And the people from the eastern half of the United States have no idea what that means.  That’s all land that’s off the local tax rolls.  That’s all land that carries increasingly severe restrictions on public use and access, which means it’s generating very little economic activity to these regions.  And often, federal ownership means that federal land use policies are in direct contravention to the wishes of the local communities that are entangled with it.

Tuolumne County is one of the biggest recipients of PILT funding in my district.  The federal government owns 3/4 of the land in that county.  Tuolumne gets $2.2 million in PILT funding out of roughly $150 million in operating revenue.  So the federal government sits on 75 percent of its potential property tax base and compensates it with 1.5 percent of its budget in PILT funding.

Fresno County is the largest PILT recipient in my district.  The federal government sits on 40 percent of its land and compensates it by one percent of its budget.

Our short term goal is to continue current levels of PILT funding.  

Our intermediate goal must be long term reauthorization, so that you don’t have to come back here every six to 12 months and so that you can plan long-term for what PILT funding you can expect to receive.  Counties impacted by excessive federal land ownership should not have to beg to reauthorize this compensation every year.  The problem is that every authorization must have a fiscal offset, and it is easier to find an offset one year at a time than for ten.  That is not an insoluble problem, but it is why the typical pattern of PILT authorization has been to take the path of least resistance, particularly with so many other fiscal issues demanding congressional attention.

But our long term goal must be to restore adequate land to every county, and sound forest and resource management to the federal estate in order to support a thriving local economy and an ample local tax base.  And that’s why we have to keep educating our eastern colleagues who don’t have this problem.  I point to little Alpine County and ask people to imagine how the economy of their community would fare if the federal government owned 96 percent of the land in their county, forbade or greatly restricted any economic activity on it, and ignored the pleas of their local city council or county board?

I realize each county is different.  Mariposa County in my district includes Yosemite Valley, one of the crown jewels of the National Park System.  Obviously, the federal government’s presence there is essential for the preservation of this national treasure.  There is always going to be a bigger federal footprint there than other parts of the country.

But we’ve got to restore balance and common sense to federal land ownership and management.  Look at the Federal District of Columbia.  Washington, D.C.  The nation’s capital.  Look at the national mall, all the government buildings, all the memorials and parks.  The federal government owns roughly one fourth of the land area of the federal capital.  There is no earthly reason it should be sitting on 2/3 of Utah, 4/5 of Nevada or half of California.  

It reminds me of Lincoln’s story of the farmer who said, “I ain’t greedy for land – all I want is what’s next to mine.”

The Federal Lands Subcommittee has three principal goals: to restore public access to the public lands; to restore sound management to the public lands; and to restore the federal government as a good neighbor to those communities most impacted by the federal lands.

But overarching these imperatives is the simple fact that excessive federal land ownership in the West has become a stultifying drag on our economies and a direct impediment to taking good care of our public lands.  

There needs to be a proper balance between federal ownership, state and local stewardship and the productive private ownership of lands.  And that is what we are seeking to restore.
Source: Congressman Tom McClintock