Friday, Jun 28, 2024 9:30 PMUpdated Friday, Jun. 28, 2024 9:38 PM
Funds help cover cost of county services, lost revenue from federal lands
The federal government announced a 21% decrease in Payment in Lieu of Taxes this week for La Plata County. The annual funds are paid to counties with federal lands to help cover costs and expenses associated with those lands. (Courtesy San Juan National Forest)
The federal government announced a 21% decrease in Payment in Lieu of Taxes this week for La Plata County. The annual funds are paid to counties with federal lands to help cover costs and expenses associated with those lands. (Courtesy San Juan National Forest)
La Plata County government learned this week that its 2024 Payment in Lieu of Taxes from the Department of the Interior will be $200,000 less than last year.
The department plans to shell out just $781,397 to La Plata County, about 21% less than last year, according to the department’s announcement on Wednesday. In the past, the funds have helped pay for road and bridge projects, said County Manager Chuck Stevens.
The decline in federal funding comes as the county gears up to begin its budget process and copes with shrinking revenue from property taxes.
Shrinking revenue sources
The PILT program, which provides states and counties with funds to offset the lost revenue from nontaxable public lands within their boundaries, allocated over $47.5 million to Colorado, about $2 million more than last year. The funds can then be used for public services, like education, law enforcement, public health and more.
So why did La Plata County’s funding decrease?
Department of the Interior administers the funds, taking into account a county's public lands acreage, population, prior-year payments received from other federal programs and adjustments for inflation when allocating the funds, according to Giovanni Rocco, spokesman at for the Interior.
It was these prior-year payments that accounted for the change, Rocco wrote in an email to The Durango Herald. The county received about $670,000 in 2023 (about $300,000 more than the year prior) from other federal programs, so that amount was deducted from the PILT calculation for 2024, making the final PILT amount decrease. He explained that “generally, when prior-year payment deductions increase, PILT payments decrease.”
While La Plata County has used most of the PILT funds for road and bridge projects in the past few years, Stevens said he is not sure where the funds will go in the budget for next year because the office is just now beginning to put together that year’s budget.
The county anticipated close to $1 million in PILT funds this year – about the amount it had received in the past few years – so the lower payment will be counted as a loss and will influence projections for the next budget.
In addition to less PILT funding, new Colorado state legislation that limits the amount of property tax a county can collect also complicates this year’s budget planning process, Stevens said. An attempt to provide tax relief to residents dealing with higher property costs means counties are receiving less revenue to cover the cost of services.
“It's a decrease in revenue, but our expenditures haven't decreased,” Stevens said. “They're going to stay the same or increase. And so, yeah, this absolutely has an impact. It's just a challenge that we'll have to deal with.”
What’s next for La Plata County?
As the county government begins the budget process in the next few months, Stevens said the office always works to budget conservatively. Still with this year’s extra challenges, he said his team is going to have to “look internally very hard and scrutinize expenditures, control expenditures where we can.”
“The last thing we ever want to do is have to reduce services. But certainly it's always on the table,” Stevens said. “Just like any organization, my biggest expenditure is going to be personnel costs. … We don't want to have to do a hiring freeze, or we don't want to have to reduce staff, or any of those things, but those are tools that have to be considered.”
The county will consider how to generate more revenue from other sources, he said, but ultimately it must cut expenditures and “tighten our belt across the board.”
To determine which expenditures to prioritize, Stevens’ team will look to the La Plata County Strategic Plan, which outlines the county’s goals and concerns from residents, businesses and the Board of County Commissioners. Those are grouped under themes like safety and well-being, sustainable growth, economic vitality, good government, and thriving and inclusive communities.
“At the end of the day, there's a state statute that says, by law, I have to present a balanced budget to the board,” he said. “So I will do that. Those are the constraints that I have, and it'll just come down to prioritize values across the community.”
In Washington: Both Colorado senators welcome funding
Sens. John Hickenlooper and Michael Bennet
Sens. John Hickenlooper and Michael Bennet
Colorado Sens. Michael Bennet and John Hickenlooper celebrated the announcement of PILT funding in a news release.
Bennet said the funds help provide essential services like law enforcement and road maintenance that counties wouldn’t otherwise be able to support.
“These funds will provide Colorado communities certainty and show that the federal government continues to uphold its commitment to public lands counties,” Bennet said.
Hickenlooper said the funds help communities invest in essential services like firefighting and infrastructure in support of public lands.
“Our public lands, and the local communities surrounding them, make Colorado a standout place to live and visit,” Hickenlooper said.
Congress is working through 12 annual spending bills that must be passed and signed by the president before Oct. 31 to avoid a government shutdown. Though the 2024 federal budget was passed several months late, this year’s PILT announcement came right on time compared with previous years.
The senators sent a letter to the Senate Appropriations Committee in May asking that it fully fund the program for fiscal year 2025.
The letter, signed by over 30 senators, reiterated the necessity of the funding and called on the committee to work toward a lasting solution to ensure that PILT funding remains intact for years to come.
“Moving forward, we look forward to working with you to enact a fiscally responsible, long-term solution to permanently and fully fund PILT and eliminate the uncertainty that counties face each year,” the senators wrote. “Doing so would ensure the federal government upholds its long-standing commitment to public lands counties.”
Kathryn Squyres is an intern for The Durango Herald and The Journal in Cortez and a student at American University in Washington, D.C. She can be reached at ksquyres@durangoherald.com.
