Every year, the federal government pays Utah counties what’s known as PILT – “payment in lieu of taxes” for the federal land in their area that is not subject to property taxes.
But – get this – no one has ever figured out what those taxes would be. And the state gets around $35 million from the feds on about 35 million federal acres – a figure determined somehow by federal land managers.
Now Rep. Ken Ivory wants Utah to do a study on how much all Utah counties, school districts, and cities, mostly in rural areas, should really be getting in PILT payments each year.
“We’re guessing it is between $5 billion and $6 billion each year,” says Ivory, R-West Jordan, an attorney who is leading the charge in getting the federal government to return BLM and national forest lands to the state – as promised at statehood in 1896.
Of course, there’s little chance that the feds – it likely would be Congress – will actually give Utah that much money, even if they should and PILT law indicates so.
“'In lieu' means you get something of equal value for what you are giving up,” says Ivory, who chairs the state’s Federalism Commission, tasked in his bill with overseeing the in lieu tax accounting.
Will Utah state government actually send the federal government an invoice, saying you owe this much in PILT?
“Well, maybe something like that,” said Ivory.
Certainly, Utah’s federal congressional delegation will be asked to push for the total PILT payments.
He asks: Can you imagine what it would mean to rural school districts, counties, and cities – even water districts – to get $5 billion to $6 billion each year to split up?
Rural schools would be, well, rich.
County health departments, likewise.
Rural roads, all kinds of things, would get a whole lot of money.
The Legislature’s Fiscal Analyst Office will work with local county assessors to figure out the value of federal land based on the nearest private land that is currently being taxed.
Admittedly, most of that federal land would be classified agricultural and such.
Since we are talking about property tax value, there would be no attempt to offset taxes generated by federal land use – like sales taxes at a tourist hotel or gas station.
“This is about lost property taxes and PILT payments,” said Ivory.
Oh, and to just be fair, the $35 million actually paid under PILT will be subtracted from the $5 billion or $6 billion tax notice sent to federal officials.