PILT was created in the 1970s to offset the revenues that counties – mostly in the West – lost due to tighter environmental regulation on federally owned lands. It was a “make ’em an offer they can’t refuse” scenario where the federal government said they would offset lost tax revenues with direct payments that the counties could then use to pay for their schools, public safety, and all of those boring things. In other words, the counties were “asked” to trade economic independence and good jobs for an annual check from Uncle Sam.
This may not seem like a big deal to states east of the Rocky Mountains – you could add up all of their PILT payments combined and it wouldn’t equal the payments that go to any two Western states. But if your county is 90 percent (or even 98 percent) owned by the federal government it’s easy to imagine that having no property or income taxes coming off of those lands can have a significant impact, not just to counties’ coffers but to their way of life.
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