North Olympic Peninsula counties to see big increase in federal payments

By:  Jesse Majors
Source: The Peninsula Daily News

Clallam and Jefferson counties will see significant increases in payments in lieu of taxes from the federal government.

Clallam County is seeing a nearly $400,000 increase in payments in lieu of taxes (PILT), marking a 40 percent increase in funding, according to the office of U.S. Sen. Maria Cantwell, D-Mountlake Terrace, while Jefferson County will have a $444,000 increase in funding, a 32 percent increase.

Clallam County Administrator Jim Jones said he has no idea how the federal government calculates PILT payments to jurisdictions, but he has never seen an increase like this — and he’s not complaining.

“It’s a big deal and we all depend on getting that money,” Jones said.

Jefferson County Administrator Philip Morley did not return phone calls and emails asking for comment Thursday.

PILT payments are made by the federal government to compensate local jurisdictions for land that has been taken off the tax rolls by the federal government. Those funds go into the counties’ general funds.

The federal government owns 705,211 acres of land in Jefferson County. In Clallam County, it owns 523,541 acres of land.

“Local governments in rural communities throughout Washington depend on PILT to fund critical services and strengthen the community,” Cantwell said in a written statement. “I will continue working with my colleagues to make sure we provide access to this vital funding that enables communities throughout Washington to plan for the future.”

As the top Democrat on the Senate Energy and Natural Resources Committee, Cantwell wrote a letter to appropriators arguing for the money, and then helped pass an increase in the 2018 PILT funding that was included in the Omnibus Appropriations Act enacted in March of 2018, her office said. Jones said PILT payments always have been related to the number of acres of land the federal government holds in a county, but said it isn’t clear how the payments are actually calculated.

“It’s a great thing, but we have no way to predict it,” Jones said, adding that he has never seen payments decrease.

The formula used to compute payments is based on population, revenue sharing payments and the amount of federal land within a county, according to the Department of Interior. The Trump Administration proposed cutting PILT funding in its draft 2018 budget released last year.

Jones said the funding will help the county offset increased costs expected by recent legislation that prohibits Washington state courts from charging legal financial obligations to indigent defendants. Jones predicts that lack of revenue will be about $400,000, close to what the county is receiving from the federal government. He said this shot of unexpected money will help the county get through the year better than expected. The county had budgeted to lose $961,370 — much of which is one-time costs — this year, but Jones said the county is now tracking to lose $675,000. He said the budget was “structurally balanced” originally, meaning ongoing revenues were about equal to ongoing expenses, but the budget had become structurally unbalanced due to the increased court costs. In anticipation of that increase, Jones said the county had opted against some of the one-time expenses it had approved last year. “This whole court thing has thrown us into a loop,” he said. Jones said PILT appears to make up for lost revenues from the courts, but the county is still in a financial bind. After bargaining with the county’s unions, Jones expects the costs there to increase about $1 million a year. He plans to address that further with the Clallam County Board of Commissioners during their meeting Tuesday.

“This is going to be a major issue for the new county administrator and the county commissioners,” he said, adding that Clallam County will have about $11 million in reserves. “It’s not a crisis,” he said. “A lot of counties are in crisis. We’re not.”