At an average price of $1.56 per acre, the $3.19 million the federal government sent Tooele County last year for Payment In Lieu of Taxes may have been a real bargain for the federal government — or Tooele County.
Who got the bargain is dependent upon the calculated value of two million acres of federal land included in the PILT program.
In 2014 the PILT payment for Tooele County is estimated to be $3.1 million, the third largest single source of revenue for the county’s general fund.
At its 13.3 percent of total revenue, PILT is only outranked as a revenue source by $4.5 million in general property taxes, and $3.8 million in mitigation fees from waste companies that operate in the county’s west desert.
If Tooele County billed the federal government for the county government’s portion of property tax, based on the lowest possible valuation of the PILT eligible property, the tax bill for 2013 would have been only $22,306 — leaving the county owing the federal government a $3.17 million refund.
The Farmland Assessment Act allows qualifying agricultural property to be assessed and taxed based on the land’s productive capability instead of on the prevailing market value of the land, according to Tooele County Assessor Wendy Shubert.
Productive capability is determined by the property’s soil type, topography, availability of irrigation water, growing season and other factors that determine the land’s ability to sustain crops or forage for livestock, according to a brochure prepared by Shubert’s office.
The lowest productive value for land in Tooele County under the F.A.A. is $5 per acre. The highest productive value for land in Tooele County under the F.A.A. is $588 for prime orchard property.
At $588 per acre, the federal government’s tax bill for land included in PILT would be $2.6 million or $570,190 less than what the fed paid in PILT for 2013.
Shubert suggested looking at the fair market value for federal property, because according to the F.A.A., if property assessed under the F.A.A. is sold for development or otherwise taken out of agricultural use, the property is subject to a rollback tax based on the market value of the property for the five previous years, she said.
However, determining market value of federal land included in the PILT program, which in Tooele County includes Bureau of Land Management and Forest Service property, can be difficult, according to Shubert.
BLM land ranges from the rocky tops of mountains to salt flats, and from arid land on Stansbury Island to land with potash and gold deposits.
A look at real estate listings for Tooele County show grazing land for sale in Rush Valley without irrigation or structures for an asking price of $700 per acre.
At $700 per acre, the federal government bill for PILT property would be $3.12 million, leaving the county owing the fed a $70,534 refund check for the 2013 PILT payment.
Shubert had her appraising staff look at the assessed value of private property adjacent to or nearby federal lands in Tooele County and came up with $1,000 per acre as a rough estimate of the average market value for federal land.
At $1,000 per acre, the tax bill for PILT property would be $4.46 million, which would make the federal government owe Tooele County an additional $1.27 million for their 2013 property taxes.
PILT does not cover all federal land in Tooele County. It does not include 1,574,781 acres of land owned by the U.S. military in Tooele County.
At $1,000 an acre, the property tax bill for military land in Tooele County would add an additional $3.4 million to the federal government’s property tax bill.
The tax rate used to compare PILT payments to potential property tax so far has only included the county government’s tax rate of .002176 because PILT payments go directly to the county general fund.
If the federal government was also billed for the Tooele County School District’s property tax, a tax paid by all private property owners in Tooele County at a rate of .009593, the school district would receive $34.8 million from the federal government based on $1,000 per acre market value for all BLM, Forest Service, and military property in the county.
The federal government sent a combined total of $35.4 million in PILT payments to Utah’s 29 counties in 2013.
Tooele County received the most PILT money of Utah’s 29 counties. Iron County came in second place with $3.0 million and Box Elder County came in third place with $2.9 million.
Between the military, BLM and USFS, the federal government owns 82 percent of Tooele County.
PILT distribution to counties is calculated using a formula provided by statute that includes the amount of eligible federal lands — primarily Bureau of Land Management and U.S. Forest Service land, and the population of the county.
The federal government first started paying PILT to counties in 1977 through annual allocations.
In 2008 PILT was funded through 2012 by the Emergency Economic Stabilization Act. When that act expired, PILT was reauthorized for 2013 through the Moving Ahead for Progress in the 21st Century Act, a transportation funding bill.
A jolt was sent throughout counties in January when the 2014 federal spending bill approved by Congress did not include PILT.
Earlier this month county commissioners breathed a sigh of relief when PILT funding for 2014, which was attached to the farm bill, passed Congress.
State Senator Ralph Okerlund, R-Monroe, a former Sevier County Commissioner who represents Beaver, Garfield, Juab, Millard, Piute, Sanpete, Sevier, Utah, and Wayne counties, is sponsoring Senate Concurrent Resolution 6 that calls on Congress to make reliable multi-year funding for PILT so counties may have certainty in their annual budget.
“This year counties were just holding their breath,” Okerlund told the Senate Natural Resources, Agriculture, and Environment Committee. “A lot of counties depend on the PILT payment because a lot of their lands are federally owned. Without PILT payment money they lose almost all of their budget.”