Lawyers from Wyoming’s Legislative Services Office are looking into how schools in the state may be able to obtain a larger part of some federal funds that are distributed to counties.
The U.S. Department of the Interior defines payments in lieu of taxes, shortened to PILT, as “federal payments to local governments that help offset losses in property taxes due to nontaxable federal lands within their boundaries.”
“We’re exploring it because it was brought to us as a possible way to get a little more money for our shortfall,” said Rep. David Northrup, R-Cody, the House Education Committee chairman.
While the exact disparity between spending and revenue for education varies based on the price per barrel of oil, the Legislative Services Office recently estimated that the state faces a $250 million shortage for the next two-year budget cycle, which is lower than previous estimates but still a problem.
In fiscal year 2017, Wyoming received $28.6 million in PILT funds.
“That’s a lot of money that goes to Wyoming,” Northrup said.
Some counties get more PILT money than others. A formula used to calculate the payments is based on population, receipt sharing payments and the amount of federal land within a county. In fiscal year 2017, Teton County received $1.94 million for its 2.62 million acres of federal land.
Northrup told the Jackson Hole Daily that state lawyers are exploring PILT uses and if legal options exist for using the money as education funding.
“It’s federal money, so we have to be sure we don’t step on federal toes,” Northrup said.
He expects to wait at least a week before learning more about how the funds are allocated and what the state could do with them.
“It’ll take some time,” Northrup said. “It’s a big deal.”
But what he does know is that there’s a “mishmash” around the state in terms of how the funds are distributed. According to the U.S. Department of the Interior, PILT payments can help local governments carry out “such vital services as firefighting and police protection, construction of public schools and roads, and search-and-rescue operations.”
In Teton County, the vast majority of PILT money goes into the county’s general fund for a variety of government expenditures. Teton County School District No. 1 received a small amount of the $1.94 million: $9,750 of a $13,000 amount tied back to Grand Teton National Park.
School districts around the state receive a percentage of local property taxes as a revenue stream, which leaves some district officials wondering if they can have more of the PILT funds. In Teton County, the school district received a total of 32.4 mils of property taxes in fiscal year 2017, 44.4 mils if 12 mils that go to a state school foundation and can come back to benefit the district through things like capital construction funding for Munger Mountain Elementary School are included.
A mil rate represents the amount per $1,000 of the assessed value of a property, with 1 mil being equal to 1/1,000th of a currency unit.
Some students live on federal lands that aren’t taxed, districts say, and school districts still educate those students — such as ones that live in Grand Teton National Park or on any of the 97 percent of Teton County acreage that is federally owned.
But it might not be that easy, said Rep. Mike Gierau, D-Teton. He said that when he was a county commissioner, PILT money was talked about, too.
“When I was a commissioner, we talked a lot about it,” Gierau said. “But it’s not a property tax; it’s just a payment that’s an acknowledgement that the federal government owns land in your community. It says very specifically that it’s not a property tax and it’s not meant to be a property tax.”
Section 6902 of P.L. 97-258 states that “PILT payments may be used by recipients for any governmental purpose and are not required to be further distributed by recipients (usually counties) to other local government units such as school districts or cities.”
Another issue with using some PILT funds for schools, Gierau said, is that the amount fluctuates every year. Wyoming’s PILT totals have ranged over the years, varying between $15.36 million in fiscal year 2007 to totals closer to $27 million or $28 million in more recent years.
“It’s not a guaranteed revenue source; it goes up and down,” Gierau said.
Like Northrup, Gierau expressed the need to tread carefully around federal funding but said he’s “all in favor of school funding to the fullest extent.”
“We have a structural budget deficit when it comes to education,” Gierau said. “There’s no doubt about it.”
Whether PILT remains a small way to tighten up that shortfall remains to be seen. Teton County Commissioner Mark Newcomb cautioned legislators from taking money from the county’s general fund to pay for schools.
“The board of county commissioners would be very concerned about a bill of that nature,” Newcomb said. “It’s like stealing from Peter to pay for Paul. If we’re taking some of the PILT to pay for schools, great, we support the schools, but that leaves Peter a little bit short.”