While publicly owned land makes up a good portion of rural Washington, local counties collect no property taxes on that land.
Some counties get money for some state and federal land in lieu of taxes, but the payments aren’t always reliable and are often below what would be collected from private landowners.
The state House’s Agriculture and Natural Resources Committee heard testimony Thursday on a bill that would require the state to pay counties for some state land. The bill is a first step in reforming that system, called payments in lieu of taxes or PILT, said Rep. Norm Johnson, R-Yakima, the bill’s author. “It’s an issue of fairness to the counties.”
For instance, about 75 percent of Yakima County is made up of public land. But when the county had expected about $415,000 from the state Department of Fish and Wildlife, instead, it got about $125,000, which was divided among school districts, cities and other taxing authorities.
That’s because legislators suspended the payments to help close the budget shortfall.
Johnson’s bill, House Bill 1073, requires the state to make full payments, which are supposed to equal property taxes that would be generated on similar open and undeveloped land.
It’s not rare for state and federal governments to rob PILT funds to cover other expenses, said Daphne Kenyon, a tax policy analyst at the Lincoln Institute of Land Policy, a nonpartisan think tank in Cambridge, Mass., “You have a similar issue in tough times, when states said, ‘Yeah, I know we made promises, but we’re not going to pay.’ “
Under Johnson’s bill, the state would only pay for certain Fish and Wildlife lands. Other property owned by the state would not be affected by the bill.
The bill has backers on both sides of the aisle and either side of the Cascades. One of the bill’s co-sponsors, Rep. Brian Blake, D-Aberdeen, heads the Agriculture and Natural Resources Committee.
Blake gives the bill a “good chance” of passing through his committee. But he said he’s unsure how it will do in the Fiscal Committee, where concerns about another budget gap could sink it.
Johnson said he gives the bill a “50-50 chance of getting through the House.”
He gives it better odds in the state Senate, where a coalition of Republicans and conservative Democrats hold a slim majority.
Dan Catchpole can be reached at 509-759-7850 or firstname.lastname@example.org. Follow him on Twitter at twitter.com/dcatchpole.