PAYGO Budget Bombshell for Utah Defused by Tax Bill Success

There is plenty of public land in Utah and, at 965,489 acres times $2.05 in 2017, there is a precedent that Sevier County officials are counting on from the U.S. Department of the Interior. As with last year, they plan to fund some of their government operations thanks to Payment in Lieu of Taxes, or PILT, funds represented in that formula. PILT monies are the portion of the budget our federal government specifically sets aside for communities with lower than usual property and extraction tax dollars resulting from large amounts of land owned (and, therefore untaxable) by the federal government as “public land.”

Sevier County officials have placed $1.9M of PILT revenue into their 2018, approved and adopted budget earlier in December and presently, the odds are good for the appropriation. Many of Utah’s 29 counties do exactly the same thing. If Sevier succeeds in obtaining their $2.05/acre PILT allotment, that will put them just behind heavily populated Utah County (Provo, Orem area) which obtained $2.60/acre and Sanpete County (Fairview, Manti) at $2.56/acre in 2017. The largest PILT payment in Utah last year went to Tooele County which received $3,573,253 at only $1.73/acre. All of these are above the average among all 29 of Utah’s counties of $1.119. The lowest per acre payment went to San Juan County in the four corners area at $0.53 but represented number eight on the total payment of $1,620,077 last year. In New Mexico, the payment totals average $1.72/acre.

Prior to the passage of the Tax Cut and Jobs Bill revision of December, 2017 (ref: Division D, Sec 4000) celebrated by a Republican controlled congress, state and local authorities were anxious about how prior statutes such as the (2010) “Pay As You Go” provisions could have held up their access to federal monies. The programs involved include the Children’s Health Insurance Program (CHIP), PILT, and federal programs administered through the Agriculture and Interior departments where rural areas are particularly sensitive.

The PAYGO statute, waived for the seventeenth time since it was passed as a first-step toward a responsible government spending and perhaps (in the long run a balanced budget effort), was treated as a given by the Utah Senators that Utah Political Capitol contacted prior to the tax bill’s passing. Referring to the deficit’s long-term impact of their much-ballyhooed bill, “If you spend a trillion and a half dollars, you have a lot of money to spread around,” said the New York Times’ David Brooks during an appearance on PBS’ Newshour Friday.

Utah politicians have been especially supportive of the Trump administration, allowing for the kind of confidence displayed by almost all of rural America. However, without PAYGO in place, there is no guarantee that programs such as PILT or CHIP will survive the next round of federal budgeting, something that could throw the budgets of western rural counties such as Sevier into chaos as they scramble to find funds for even the most basic of civic services.

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