Counties across the country, that have a significant chunk of government-owned property within their jurisdictions, received sizable checks in the last few weeks. What for and why still remains somewhat of a mystery, however.
John Ongaro, director of Government Relations for St. Louis County, said their county questions whether the money is real or not?
In the state of Minnesota, the three top counties receiving the unexpected funds were: St. Louis County, who received the lion’s share at $2,129,458, Lake County $1,193,795, and Cook County at $761,263.
“We’re not going to do a thing with it until we determine it is legitimate money,” cautioned Ongaro.
The St. Louis County Board of Commissioners sat down with their county auditor this past Wednesday morning in an attempt to try and unravel the money mystery.
At the local level, Cook County Auditor/Treasurer Braidy Powers first thought the money was to make up for previously sequestered secure rural school funds; monies set aside by the federal government that has historically provided additional funding to counties and schools that are situated near federally owned forest land, Superior National Forest, in our case. “AMC [Association of Minnesota Counties] had said they felt we were going to see the funding restored to previous levels so, I assumed, it was back payment for the monies that had been withheld,” conjectured Powers.
In general, federal lands can be owned by a variety of agencies and entities, including the U.S. Forest Service, the Bureau of Land Management, the National Park Service, the U.S. Fish and Wildlife Service and branches of the military.
As Secretary of the Interior Ryan Zinke indicated in his June 27, 2018, press release, over $552.8 million was to be distributed to 1,900 government entities in 2018 through the Payments in Lieu of Taxes (PILT) program.
This represents the largest total PILT disbursement to date since the program was first enacted in 1976, after several years of growing pressure from county officials nationwide.
“PILT investments often serve as critical support for local communities as they juggle planning and paying for basic services such as public safety, firefighting, social services and transportation,” Zinke stated.
Cook County’s PILT proceeds contribute roughly $235,000 to our annual revenues. In 2010 we received the highest combined revenues from PILT, Secure Rural Schools and the BWCA Thye-Blatnik funds, totaling nearly $3 million in revenues. Since then, the aggregate of these combined revenue streams has declined.
To further muddle the issue, be that as it may, a class action lawsuit was filed that charged the federal government underfunded the Payments in Lieu of Taxes program in 2015, 2016 and 2017.
Both St. Louis and Lake County Board of Commissioners voted to join the lawsuit. Cook County commissioners have not taken any action to date. Counties face a September 14, 2018, deadline to decide whether to join the class-action lawsuit, or not.
Writing in a June 28, 2018, article for the National Association of Counties (NACo) Jonathan Shuffield, NACo’s associate legislative director for public lands, who lobbies Congress on issues including PILT, provided this background:
“In 2008, Congress significantly amended the PILT statute by mandating full funding through 2014. Congress also repealed the original statute language that made the program discretionary and subject to the annual congressional appropriations process. Due to insufficient appropriations for 2015–2017, PILT recipients did not receive the full amount to which they were entitled under the PILT statute based on the Department of the Interior’s full payment calculation.”
One small county, located in the western United States, decided it wasn’t going to take this sitting down!
Kane County, Utah–with a population about two thousand more that Cook; 425 thousand aces more than we have; and with 95 percent of their acreage government-owned (Cook is 91 percent government owned)–filed a lawsuit in the U.S. Court of Federal Claims in June 2017, seeking to recover its own underpayments and the underpayments of all other PILT recipients nationwide for those years.
In December 2017, the court ruled in Kane County’s favor for FY2015 and 2016 underpayments and issued a similar ruling on FY2017 underpayments in March 2018.
Shuffield explains, “The federal government argued in court that despite Congress’ removal of the original statute language treating PILT as a discretionary program, Congress placed the 2008–2014 timeline limitation on the current statute language making PILT mandatory. Federal Judge Elaine Kaplan disagreed, calling the government’s argument ‘untenable’ [basically, illogical and indefensible].
“In her December 2017 ruling, Judge Kaplan elaborated that the federal government ‘is urging the Court to read the current statute as though it still contained the limiting language that Congress repealed in October of 2008; in other words, the government asks the Court to find that Congress resurrected a repealed provision of law by implication…The government does not cite a single case that supports the resurrection of a repealed provision of law by implication.’
“The court also certified the lawsuit as a class action, and ordered that an official notice of the formation of a class be sent to each underpaid PILT recipient. That notice of the class formation was mailed on June 19, 2018.”
The latest payments– if in fact that’s what they are–do not reflect the funds from the lawsuit settlement, which are forthcoming, although the government has the right to appeal the court’s decision.
The exact amount each county may receive and the length of any legal wrangling– should it ensue– before any payments are issued, remain unsettled issues. It is also unclear if the government will appeal the rulings.
While any lawsuit settlement, in and of itself won’t amount to much for Cook County (after the attorneys take their share, etc.), what is significant is if the lawsuit concludes the federal government is required to replace sequestered funds for PILT, then Powers recommends we look further into replenishing sequestered BWCA funds which, for the last five years, have been approximately $140M under normal payouts (we’ve received $1,885,000 annually of a projected $2,025,000 over that five-year period). Cook County maintains 653,215 total acres with an average payment per acre of $3.69 which comes to $2,410,363.30. The state average per acre is $2.94 (2016 data from United States Department of Agriculture (USDA) Forest Service website).
If Kane County can do it, we should be able to do it.
Which introduces another mystery: why our commissioners don’t stand up for the taxpayer, at least every once in a while?
Former Cook County Commissioner Garry Gamble is writing this ongoing column about the various ways government works, as well as other topics.
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