By Marcy Stamper
Okanogan County became the poster child for the need for federal payments to counties with large tracts of nontaxable land at a U.S. Senate hearing last week.
Sen. Maria Cantwell (D-Washington) contrasted Okanogan County’s 1.6 million acres of federal lands with the 14 acres in House Speaker Paul Ryan’s Wisconsin district to get her colleagues in the House of Representatives to understand the importance of the funding. Pointing to the disparity in untaxed acreage, Cantwell said, “Therein lies the huge disconnect.”
Funding for the Secure Rural Schools and Community Self-Determination Act (SRS), which compensates counties for nontaxable land, expired in 2015. Washington counties got $17 million in SRS payments in 2016 but, without reauthorization, those same counties received just $2 million last year, Cantwell told the Senate Committee on Energy and Natural Resources committee last week.
For Okanogan County, that translates to $180,000 for 2016, compared with $760,000 the previous year and $715,000 in 2014, according to County Treasurer Leah Mc Cormack. Half of those monies go to the county’s Public Works Department, while the other half is divvied up among eight school districts, she said.
Lawmakers in the House and President Trump don’t seem to understand the importance of the SRS program, which funds roads, emergency services and schools in more than 775 rural counties throughout the Western U.S., said Cantwell. Congress has not passed new legislation since SRS expired two years ago, and money for the program was not included in the president’s proposed budget, she said.
Trump’s budget also cut funding for a similar program, called Payment in Lieu of Taxes (PILT), by 17 percent, said Cantwell.
Ensuring compensation for counties with vast swathes of federal land attracts bipartisan and bicameral support, as evidenced by a bill introduced last week in Congress that would retroactively restore the SRS funding to cover payments for fiscal years 2016 and 2017 — but not guarantee it beyond that. The Senate bill was signed by 15 senators, including Cantwell and colleagues Orrin Hatch (R-Utah) and Mike Crapo (R-Idaho). Cathy McMorris Rogers (R-Washington’s 5th district) introduced the same legislation in the House.
In addition to the loss of funding, counties are affected by the annual uncertainty surrounding SRS and PILT, said Cantwell. Some speakers at the Senate hearing said they rely on the money to pay government workers and can’t plan for staffing, emergency services or infrastructure projects.
School district doesn’t count on the money
“We were just looking at the SRS money within the larger framework of federal funding in general, and trying to make sense of the impacts the federal budget will have on the district,” Methow Valley School District Superintendent Tom Venable said this week.
The money that comes through the SRS program is so inconsistent that the school district doesn’t depend on it when creating its budget, said Venable. When SRS money is available, the district has used it to offset the cost of smaller classes.
Venable said it’s still too early to predict the full effect on the district of changes in both the state and federal budgets, but he anticipates cuts in funding for professional development.
School administrators expect a modest increase in federal monies designated for school choice, most likely in the form of vouchers. “We can anticipate an increase in funding, but the specific allocation could mean a net loss to public schools — and make it less possible for schools to offer choice,” said Venable. The federal vouchers could potentially go beyond charter schools and be used for private schools, he said.
History of SRS and PILT
Nearly 100 years ago, Congress passed legislation specifying that 25 percent of revenues from timber harvests on federal lands would be shared with affected counties for “the benefit of the public schools and public roads in… counties in which national forests are situated.”
Because of significant reductions in timber harvest over the past 30 years, those revenues have dropped more than 70 percent, according to McMorris Rodgers. SRS was first enacted in 2000 to make up for this change in revenue. Without SRS, counties receive only the original 25-percent allocation.
The PILT program was started in 1976 as another way of compensating counties for nontaxable lands. Federal PILT funding for Okanogan County has remained consistent in recent years, with the county getting between $2.2 and $2.4 million annually, said Mc Cormack.
Nevertheless, the 2016 Congressional appropriation that fully funded PILT at $452 million is $28 million short of the estimate needed for the current year, a speaker for the National Association of Counties told the Senate committee.
The county also gets state PILT money, which has been cut by two-thirds in recent years. The state Senate has proposed additional money for the program, but the budget is still in play.
In his Senate testimony, Mark Haggerty, an economic geographer with the nonprofit research group Headwaters Economics, proposed a permanent trust fund to replace the recurring ritual to get Congress to adequately fund SRS and PILT. Alternatively, Haggerty proposed combining the two programs to provide predictable payments.