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Wednesday, 17 September 2014 14:00

Fretting the PILT jilt: WNC counties could lose out if formula is altered

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It’s about that time. Time to worry about PILT money.  

After seeing the federal payment in lieu of taxes (PILT) program receive a one-year extension early this year, local leaders are now looking out for more than the program’s continuance going forward.

 

“The problem,” Swain County Manager Kevin King recently gave his commissioners a heads-up, “is that they want to change the formula.”

The PILT program is meant to address the shortfall of private property tax revenue in areas that boast an abundance of public land. The program allocates money to county governments based on the amount of federally owned land that falls within their borders. Swain, along with Macon, Haywood, Cherokee and Jackson represent five of the six North Carolina counties that receive the largest PILT allowances.

King told his commissioners that there was talk of Western states pushing to change the formula by which PILT funds are divided. The formula — which ties PILT payments to an area’s population — was possibly at risk of being changed to benefit the West, with its bounty of public land and sometimes sparse populations. 

“There’s only one pot of money,” King said, explaining that more money for other areas meant less money for places like Swain. 

Eighty-seven percent of Swain County’s land is federally owned. Because of that, a considerable amount of PILT money hits the area. In 2013, the county received $577,000, or 4.5 percent of its total budget. 

Anytime you’re in front of Mark Meadows, King said to the commissioners, “one thing you want to keep saying is …”

“ … keep that PILT coming,” Commissioner Chairman Phil Carson completed the thought. 

Later, Commissioner Steve Moon was quick and blunt. Monkeying with the current PILT formula could throw Swain for a real loop. 

“That’s going to hurt us, that will really be a blow to Swain County, it will be a blow,” Moon said. “Let’s hope and pray that doesn’t happen.”

Commissioner David Monteith estimated that altering the formula could drop Swain’s PILT money to around $150,000. He described that prospect as “a disgrace.”

“Because we didn’t ask for all this federal land, it was forced upon us,” Monteith said. “We didn’t volunteer give this. A lot of Western counties, that land was not lived on.”

It’s a thread Monteith had begun earlier during the meeting. He contends that Swain belongs higher in the PILT pecking order because its public land is a result of the federal government removing residents from the area to pave the way for Fontana Lake and the Great Smoky Mountain National Park.

“That’s why we have to stand and fight, for what it cost us,” he told his fellow commissioners. “It was so much greater.”

“It sucks what they’re trying to do,” Monteith said later. “These people out West are just trying to get more for themselves. We’re going to have to do the same thing.”

U.S. Sen. Kay Hagan’s (D-NC) office reported that legislation to reauthorize PILT is currently being drafted and said the senator would be eyeing the language to ensure that North Carolina communities are not disadvantaged. U.S. Rep. Mark Meadows (R-NC) said he didn’t expect his constituents to suffer due to any formula changes.

“Really, at this point, I don’t see the formula being changed drastically, if at all,” Meadows said. “Really, at this point, the PILT numbers and the monies that the counties have to count on should stay in the same numbers.”

Meadows did say that Western states do periodically try to tilt PILT their direction. But he doesn’t see such a movement gaining traction. 

“Some of the Western states lobby from time to time and try to get it changed,” Meadows said. “I do not see that as something that is a clear and present danger to next year’s formula.”

Meadows said that he didn’t expect to see anything on the PILT front any time soon — “the debate on that probably won’t come up until December” — but noted the program would likely be addressed earlier than it was during the previous budget cycle, when PILT’s fate was left dangling uncertain until February of this year. Plus, its very existence probably isn’t on the line this year. 

“Last year it was very, very different, because we were running up against the potential for losing PILT,” Meadows said. “I do not see at the current point that danger being real right now, but it is something to keep on top of.”

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