Senate Engrossed

State of Arizona Senate Fifty-fourth Legislature First Regular Session 2019

SENATE CONCURRENT MEMORIAL 1002

 

A CONCURRENT MEMORIAL

 

urging the united states congress to provide full, timely and sustainable long-term funding for the payment in lieu of taxes program.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 

To the Congress of the United States of America:

Your memorialist respectfully represents:

Whereas, the authority of state and local governments to promote the highest value and use of land is critical to funding education and other essential government services; and

Whereas, under the Federal Land Policy and Management Act of 1976, federal land policy changed from one of disposal, in which land would enter the state tax rolls, to permanent federal retention as untaxable public land; and

Whereas, the State of Arizona is composed of 113,417 square miles of land, of which 42% is federally owned, nontribal land that is unavailable for economic development and not part of the property tax base. Less than 17% of the land in Arizona is private land; and

Whereas, recognizing the substantial burden this policy change imposed on the ability of state and local governments to fund education and other essential government services, Congress established the Payment in Lieu of Taxes (PILT) program in 1976 to compensate for the tax revenue that these governments otherwise would have generated from the land; and

Whereas, the national average PILT payment in fiscal year 2018 was $0.91 per acre, which is far below the amount that federal lands would return through both value-based taxation and economic development; and

Whereas, for more than a decade, Congress has been erratic in the amount and timeliness of PILT payments to Arizona counties; and

Whereas, funding for fiscal year 2018 PILT was included in the Consolidated Appropriations Act, 2018, totaling $553 million, but the fate of fiscal year 2019 and future years is still unknown; and

Whereas, a lack of PILT funding places the large, unsustainable burden of providing services squarely on the backs of Arizona taxpayers and critically impacts the local budget process and structural solvency of counties and public school systems; and

Whereas, without regard to the longstanding debate whether the federal government should relinquish control of Arizona lands, Congress should pay the full amount in lieu of tax revenue that is denied this state's taxing entities as long as the federal government does withhold state lands from being subject to tax; and

Whereas, an estimated $9.4 billion provided by state, county and local monies, including 43% of the state general fund budget, funds K-12 education in Arizona.  The state and local governments struggle to provide this and other essential government services, and proper payment of PILT will help this imbalance; and

Whereas, the federal government has the duty to reimburse local jurisdictions for the presence of federally managed public lands in a reliable and consistent manner.

Wherefore your memorialist, the Senate of the State of Arizona, the House of Representatives concurring, prays:

1.  That the United States Congress establish, in coordination with this state, an objective standard for calculating the value of PILT payments that are equivalent to the tax revenue this state, political subdivisions and school districts would otherwise be able to generate but for federal control of Arizona lands.

2.  That the United States Congress provide full, timely and sustainable long-term funding for the PILT program to help create financial stability within Arizona's counties and public school system.

3.  That the Secretary of State of the State of Arizona transmit a copy of this Memorial to the President of the United States Senate, the Speaker of the United States House of Representatives and each Member of Congress from the State of Arizona.