Reducing the Burdens of Public Land

January 15, 2014

I stand before this body today to talk about the Omnibus Spending package that the Senate will be considering over the next few days. I have some concerns related to this Omnibus Spending package that relate to a program called PILT. It is an acronym with which most Americans, and probably even most members of congress, are not familiar. It stands for, “Payment in Lieu of Taxes.” The program was developed so as to help those states, including my home state of Utah, in which the vast majority of the land is owned by the federal government.

Beside me is a map of the United States. In red, you can see all the land that is owned by the federal government. As you can see by looking at the map, most of the land west of the Rocky Mountains, more than 50% in fact, is owned by the federal government.

The federal government by contrast, owns very, very little of the land east of the Rocky Mountains. Being from a “public land state,” presents some interesting, some very significant, and some very substantial challenges. Among those challenges is the fact that the federal government has deemed this land, has legislated this land as being beyond the ability—beyond the authority—of states and their political sub-divisions. This includes counties, local taxing jurisdictions, beyond the states and their subdivisions to tax. We can't collect property tax revenue from any of that land.

As a result, a lot of our communities in public land states are impoverished, at least impoverished relative to what they might otherwise face. They're impoverished relative to what their ability would be to collect revenue through property taxes in public land states.

For that reason, this PILT program was created to try to offset, at least to some degree, the heavy cost, and the disproportionate burden that is placed on the shoulders of public land states and communities. So each year, congress funds this program, and that program then partially offsets the lack of property tax revenue flowing through these public land states and communities.

Here's the problem that I'd like to focus on today: The Omnibus Spending package that we're considering this week contains no funding for PILT.  No funding, whatsoever. This is potentially devastating to public land states, including Utah, Wyoming, Alaska, Montana, and many other states, especially those throughout the West. The problem is that America's public land states and counties can't wait any longer. This program must be funded, and it must be funded in this bill.

Public Lands Map

Now, here's a letter from a commissioner in Piute county, Utah. This commissioner states as follows. He says, "PILT, not being funded in 2014, will have a devastating impact on all counties in the West. But it's particularly devastating to a county the size of Piute, with 74% of Piute county under federal control, $225,000 of our $1 million budget, almost one-fourth, comes in the form of PILT payments from the federal government. Without this funding, we will be in the midst of one of the biggest disasters to hit Piute County in years. We've been scraping and scraping to try and figure out how we can fund a fourth deputy sheriff in our county, and we thought we had it figured out until this $225,000 evaporated from our county's revenue. At the present time, it is virtually impossible to staff all the police, search, and rescue and emergency services we need. With this cut, it will be impossible."

The Piute County Commissioner continues, "We'll be forced to abandon services, including all services on public lands. It'll be sad to have our public lands left without police, search, rescue and emergency services. I think it's critical to understand that the loss of PILT funding cuts clear to the bone and will be devastating to counties such as Piute."

Now, some argue, some insist when faced with arguments like this that this is all okay and that we can just wait to make PILT funding available. We'll make it available through another legislative vehicle that we'll supposedly pass later this year. In fact, some of these same people maintain: we'll make it better, we'll make it automatic, we'll make it mandatory spending when we actually do this later this year. Now, it is true that between 2008 and 2013, PILT was funded through mandatory spending mechanism. That has now expired.

But it's important to remember that there's nothing mutually exclusive about these ideas. No reason why we can't go ahead and fund PILT now with discretionary spending and then adopt something later to restore the mandatory nature of funding for PILT. We can fund PILT now in this bill, and then we can make it mandatory later. We can and we should. This would give states and counties the certainty that they need,  the certainty that they've been waiting for, the certainty that will allow them finally to plan their budgets. Remember, for many of these counties like Piute County, Utah, PILT is a substantial portion of their annual revenue stream. It is about one-fourth of the money that Piute County, Utah, has to spend every single year. 

Importantly, I offered an amendment to last year's budget, an amendment that would build a deficit-neutral reserve fund to make sure that PILT continued to be fully funded. That amendment passed. Unfortunately, the fact that it passed has apparently not been enough to make sure that it has continued to be funded. Now, we have a major funding bill before us. This spending bill occupies no fewer than 1,582 pages. It spends in excess of $1.1 trillion and yet—PILT still isn't funded. It's important to point out here that even if we do the right thing, and even if we fully fund PILT in this program this year, the PILT program is itself still not adequate. It's still in need of reform.

You see, PILT payments are quite insufficient. PILT was intended to soften the economic impact associated with the federal government owning so much of the land in the United States. In the case of Piute County, it's about three-fourths of the land. Throughout the state of Utah, it’s about two-thirds. In some states, it is well in excess of 90% (sometimes 95%) of the land in the county. PILT was designed to soften that economic impact. But regrettably, the federal government gives states through the PILT program what amount to in many, many instances only pennies on the dollar of what the taxing jurisdictions would receive if they were to tax that land, if they were to collect taxes, even if they were to collect those taxes at the lowest property tax rate; let's say the green-built rate in many counties.

We must correct that imbalance. And in the coming days, I plan to introduce legislation to begin the process of doing precisely that. After all, it makes no sense to have a program, a program that some would argue, deceptively entitle, "Payment in Lieu of Taxes," if in fact the payment in lieu of taxes doesn't even closely approximate the value that counties would receive if they were actually allowed to tax that land and collect that revenue as taxes.

If an American Citizen, a U.S. Taxpayer, for example, decided to adopt his or her own PILT program, and on April 15 of each year just sent a check to the IRS saying, “These are not my taxes, but this is my payment in lieu of taxes. I'm just paying what I feel like paying,” that would cause problems. The taxpayer in question would probably end up in prison. In any event, it wouldn't end well for the taxpayer. Yet we've allowed the federal government to get away with this over and over and over again, often to the detriment of vulnerable communities, poor communities, communities that rely on the federal government's unsteady stream of revenue, a stream of revenue, as insufficient as it is already, is now being threatened altogether.

In a sense, the problem that we face with the federal government owning all this land is not new. It's a problem that's been around for a long time. In many respects, it was a problem envisioned by some of the Founding Fathers. In fact, we could go all the way back to the Constitutional Convention of 1787 and see that it was on the minds of some of the Founding Fathers.

On September 5, 1787, at the Constitutional Convention, they were discussing the public land related authorities in the Constitution, including the authority that has now been included in what's often referred to as the Enclave Clause, Article 1, Section 8, Clause 17. One of the delegates to the Federal Convention of 1787, Elbridge Gerry, a delegate from Massachusetts, stood before the convention and made an astute observation. Mr. Gerry expressed concern that, “this power [that is, the power of congress over federal public lands] might be made use of to enslave any particular state by buying up its territory, and that the strongholds proposed would be a means of awing the state into undue obedience into the general government.”

Then, as now, wise observations often came from the state of Massachusetts. Then, as now, we have a grave risk associated with the fact that when the federal government owns this much land, the federal government has this much power. This was on the minds of the delegates to the Convention of 1787, that one of the things they needed to protect against was the concentration of too much power in the hands of the few, especially the concentration of too much power within the federal government. They understood, and each of them had a mission to protect the sovereignty of their respective states. They understood that if Congress had too much power to simply buy up too much land in any one state, disproportionately in some states, the federal government would have too much influence within that state.

Now, I would ask you, when you look at this map, does that look equitable? Does that look like an equitable distribution of federal landownership? We have to keep in mind that just as there are benefits associated with some of our public lands, there are also burdens attached to those benefits. And when you look at those burdens, it's difficult to say anything other than that they are disproportionately allocated into a certain region of the United States. They're overwhelmingly located within the Rocky Mountains and areas west of the Rocky Mountains.

And so to the extent that these benefits benefit everyone in the United States, then the burdens ought to be shared by everyone in the United States as well. And yet, they are not. PILT, again, is woefully inadequate as it is. But now, Congress is trying to withdraw funding for PILT. And even though some may say we'll fund it later this year, we have no guarantee of that, and we should be funding it right now.

As an interesting side note in response to Elbridge Gerry’s concern on September 5, 1787, the Founding Fathers put a qualifying clause into Article 1, Section 8, Clause 17. They said that Congress's plenary legislative jurisdiction over federal public land lying within a sovereign state's boundaries would exist and could be exercised only if that land. The land in question was acquired by the consent of the host state's legislature. Some have suggested that this may well mean that when the federal government owns land, when it acquires land within a sovereign state's territorial boundaries, that it owns that land just as any other proprietor would own it. That is, subject to the authority of the state and its political subdivisions to tax and regulate that land unless or until such time as the host state's legislative body parts with that bundle of sovereign rights relative to that land.

In other words, the state retains its taxing power over that land unless or until it voluntarily relinquishes it, gives it up, hands it over to the federal government. And yet, in nearly all instances where you see red on this map, that has not occurred. Now many of these states have been content with the fact that they have been receiving PILT funds, however inadequate those PILT funds may be. But now, even those are going away. And even if there is a promise that they might restored later, later this year, they're still inadequate, and we still don’t have the promise that that’s going to occur now. There's still a lot of uncertainty places like Piute County, Utah, elsewhere within my state, and elsewhere within the western United States.

In order to protect against this kind of concern, the kind of concern that the delegate from Massachusetts described on September 5, 1787, congress adopted a practice when admitting new states into the union of incorporating language into the enabling act for each new state describing what would happen to public land within the new state's boundaries after statehood. They adopted this practice and set of language that would be used each time a new state was admitted into the union. That language was included in Utah's statehood enabling legislation, legislation that was adopted about 18 months before Utah finally came into the union in January of 1896. Section 9 of Utah's enabling legislation says that public land located within the state, lying within the state of Utah," shall be sold by the United States subsequent to the admission of said state into the union." Adding to that, Section 9 of Utah's enabling legislation said that 5% of the proceeds from the sale of that land would be given to the state and would be held in a trust fund by that state for the benefit of the state's public education system.

So, as I mentioned, Utah was not the first state to have that kind of language in its enabling legislation. Many of the states that were admitted into the Union much, much earlier than Utah, had similar language in their enabling acts. Missouri had such language, North Dakota had such language—we can name state after state after state that had language like that. When you look at Missouri and North Dakota, and when you look at most of the other states that had language like that in their enabling acts, you see very little federal public land. You see, because Congress and the federal government honored those promises made to those states. Congress followed through with that commitment. Congress did what it was supposed to do.

It sold that land subsequent to statehood, holding on perhaps to a few parcels here or there that it deemed necessary for one reason or another. It made good on that promise. Those states benefited. The federal treasury benefited. The American people benefited. Now, it's important to remember that what we're talking about here when you see all of this red land representing federal landownership, we're not talking about national parks. National parks represent a very tiny percentage of federal landownership. We're not even talking about national monuments which also represent a very tiny, tiny, percentage of federal landownership. What we're talking about in the context of the PILT program are lands that are managed by the United States Bureau of Land management. This is an agency that's considered obscure, almost unheard of throughout most of the United States, but an agency that operates with a particularly dominant force in states like mine, where you see a lot of red.

I remember the first time that I showed this map to my children. My daughter Eliza, who was about eight years old at the time, was just barely old enough to understand what I was explaining to her. I told her that the red indicated ownership of land by our national government, and eight-year-old Eliza looked at that portion of the map that represented our state. She said, “Look, Dad, they own Utah!” I said, “You're right, Eliza, they own Utah.” They certainly own the overwhelming majority of it.

Some of us have not forgotten this promise made in the enabling act by most of the states admitted into the union, and yet congress seems to be determined to overlook it. I'm determined not to let that happen. Some of my friends back in Utah are likewise determined not to let that happen.

A good friend of mine, Representative Ken Ivory, who serves in the Utah State legislature, has done an amazing job educating people throughout Utah—in fact across America—on this very subject. He describes what happened with these statehood enabling acts, and why it is that the states in the western united States got left behind when it came to promises made long ago by the federal government. I commend Representative Ivory for his work on this and pledge to continue working with him on this important project.

You see, this is about much, much more than just land. This is about the ability of local communities not only to thrive, but also to survive. This is about communities where it's very, very difficult for people to get jobs. It's very difficult for people, in some instances, even to access their own property, even to access their own farms because it's impossible to get anywhere without crossing federal public land. And in some instances federal land managers will block access to the only roads that they can use to access their own property. This has to stop.

In the meantime, it's vitally important that we focus on the issues at hand, that we focus at a bare minimum on promises that the federal government has extended in lieu of the other promises. That is not to say that we're going to forget about the promises made in the statehood enabling acts. We're not. But for the moment, my attention remains focused on making sure that we fund the PILT program. It's got to be funded.

And in fact, it's got to be funded even more than it has been in the past. It ought to reflect at least a rough equivalent of the amount of money that the taxing jurisdiction could collect if it were taxing that land at its lowest rate. And at a bare minimum, even below that, we've got to make sure that the program continues to exist. We've got to make sure that the program is funded at least at its current levels. This is not asking much, but it is necessary that we do this.

The broken PILT program is, one could argue, just another example of government applying significant and unnecessary weights to the shoulders of hardworking Americans, many of whom are struggling just to get by, many of whom are barely able to keep food on the table for their families, others of whom are able to provide for the day-to-day needs of their families but they're worried about what happens next. They find that whenever they find a little bit of additional income, no sooner have they earned it than they find that it's been swallowed up, swallowed up by increasing taxes, swallowed up by higher prices for goods and for services, and they don't know how to get out of this rut in which they find themselves somewhat trapped. These are the kinds of people who suffer the most as a result of the federal government's failed policies relative to its federal public land.

We have to remember that lifting these weights is not only within the government's power; it is the affirmative obligation of government to lift those weights.

In an 1861 address to congress, President Abraham Lincoln said that the leading object of American government was, "to elevate the condition of men, to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all, to afford all an unfettered start and a fair chance in the race of life." Current PILT policy imposes government weights that make it more difficult for communities to provide important services like schools, police, and fire departments. It hampers states' abilities to budget, plan and provide for infrastructure improvements, make needed reforms to their tax systems and attract new businesses and new jobs.

This policy and the federal land management policies that accompany the PILT policy more generally is broken, and it's imposing a heavy burden on our communities. Particularly, in rural areas where the federal government owns much or most or in some cases nearly all of the land and where the needs are at their very greatest. The program is already broken. The program is already causing millions and millions of Americans to suffer. The program is already severely impeding economic opportunity for Americans.

Deepening the existing crisis of opportunity that we have in this country, which manifests itself on three different levels: immobility among the poor, insecurity among the middle class, and privilege at the top. You see, if you live in one of these states, it might be great if you were one of those people who own the few parcels of land that's not owned by the federal government. It's not so great if you live in one of those areas where the federal government owns basically everything, where you can do very, very little anywhere around you without permission from the federal government, where your local government is barely able to survive because it lacks a property tax base, and the federal government fails adequately to fund PILT and threatens in this circumstance to withdraw funding from PILT altogether.

Madam President, I respectfully implore all of my colleagues to consider the inequities inherent in this map, the inequities inherent in the PILT program and for present purposes to remember that we need to fund pilot. It's got to be reformed? Absolutely. And we've got to examine our federal landownership and management policies more broadly. Today, we need to focus on making sure that PILT is funded. Thank you, Madam president.