You Are Here: Land » County Payments Research

County Payments Research

 

Ideas for Reforming the Secure Rural Schools and Community Self‐Determination Act (SRS) and Payments in Lieu of Taxes (PILT)

July 2014

Analysis of Legislation | Single Payment Proposal | White Paper | Timber Sales-Receipts | Federal Payments History

Summary

This page summarizes research by Headwaters Economics on federal payments to counties:

  • January 2014 comparison of O&C proposals (analysis and spreadsheet)and the Senate bill.
  • September 2013 House bill analysis (CBO data, national level) and spreadsheet (USFS data).
  • Updated,Headwaters Economics proposal to combine SRS, revenue sharing, and PILT into a single payment using economic performance index.
  • White Paper with eight reform ideas.
  • Updated, Interactives of gross receipts, and timber sales and cuts.
  • History of Federal Payments at county and state levels.

Introduction

The two largest county payment programs–the Secure Rural Schools and Community Self-Determination Act (SRS) and Payments in Lieu of Taxes (PILT)–are expiring. County governments are compensated for the tax-exempt status of federal public lands within their boundaries, and these payments often constitute a significant portion of county and school budgets, particularly in rural counties with extensive public land ownership.

The way payments are funded and distributed also affects how public lands are managed, in turn influencing the kind of economic opportunities available to counties. Congress and the Administration are looking at potential reforms, and Headwaters Economics has prepared a white paper offering eight reform options as well as analysis of several major proposals in the House, Senate, and from the President.

During the past 100 years, Congress has repeatedly reformed federal land payments to counties, with each change reflecting new economic conditions and changing values of public lands—and a renewed commitment to counties. How this commitment is continued may be the most important policy decision affecting county budgets, economic opportunity, and forest health in public land counties across the country.

Payment programs have been flexible,
adapting to changing economic conditions and public values

Timeline: key developments in the history of County Payments

Large version (PDF): Historical Timeline of Federal Land Payments

Analysis of Recent Legislative Proposals

Headwaters Economics has analyzed the potential impacts of recent proposals suggested in the House, Senate, and by the President.

Single Payment Proposal

We propose a single payment solution (PDF) that combines SRS, revenue sharing, and PILT. This single payment approach has three goals: providing fair and predictable payments to counties, targeting payments to where they have the most economic benefit, and reducing the need for federal appropriations over time.

To achieve these goals, the proposal would eliminate agency-based payments in favor of a single payment program. At the same time, the new program would maintain the decoupling between county payments and volatile commodity receipts by extending federal appropriations; adjust for economic performance and opportunity; and raise the population limit in PILT based on the presence of protected public lands.

Taken together, these reforms help ensure that rural counties maintain sustainable payment levels, even if future appropriations decline. Headwaters Economics testified (PDF) before the U.S. Senate Energy and Natural Resources Committee on this topic.

White Paper: Eight Reform Ideas

Our white paper and other analysis tools consider eight ideas for the reform of county payments, explores the pros and cons of each, and evaluates whether each idea will provide stable and predictable compensation to counties, create job opportunities in line with today’s economy, and improve forest health:

  1. Let SRS expire and return to commodity revenue sharing, where county payments are tied to timber harvest levels and other resource extraction on public lands.
  2. Reauthorize SRS with no substantive changes.
  3. Let SRS expire and return to a revenue sharing system based on an expanded definition of “gross receipts” that counts the value of increases in forest health, such as watershed restoration and wildlife habitat improvements.
  4. Retain SRS payments and change the distribution formula to give proportionately higher payments to counties based on:
    1. Economic need and development potential.
    2. Control of wildfire costs by curtaining home-building on fire-prone lands.
    3. Increases in the value of forest health by public lands.
    4. The proportion of federal lands in protected status.
  5. Replace SRS, commodity revenue sharing, and PILT with a tax equivalency program, paying counties the equivalent of what they would be paid in taxes if the land were privately owned.

Headwaters Economics presents the policy options for consideration and discussion in the spirit of determining how to best provide counties with stable and predictable compensation while reinforcing today’s economic and land-health goals. We do not advocate for one idea over another and it is possible that several ideas could be implemented concurrently.


Interactive map screenshot

Interactive Mapping Tool

Headwaters Economics has created an interactive mapping tool that displays key concepts and maps that detail how counties, states, and congressional districts will be affected by the ideas considered in this paper.

Timber Resources Data Interactive Maps

These updated interactive maps show the commercial activities on National Forests such as the timber economy–gross receipts, timber harvest sales, and timber cuts.

Federal Payments History

Headwaters Economics created the Economic Profile System-Human Dimensions Toolkit (EPS-HDT) in cooperation with the Bureau of Land Management and the U.S. Forest Service. This free tool includes a “Payments from Federal Lands” report that provides a detailed history and analysis of payment data for PILT, the Forest Service, BLM, U.S. Fish and Wildlife Service, Federal Mineral Revenue Sharing from the Office of Natural Resources Revenue.

Users can run custom reports for any county, collection of counties, or states. The reports also include detailed descriptions of each program and links to data sources and methods.

For more information, contact:
Mark Haggerty at 406.570.5626 or [email]