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SALT LAKE CITY — Utah may have received $38.4 million in the last year from the federal government to make up for lands inside its borders that don't generate property tax revenue, but lawmakers overwhelmingly believe it's chump change compared with what they deserve.
To that end, both the House and Senate in the Utah Legislature on Thursday unanimously signed off on a resolution and a subsequent bill that directs a more thorough accounting of the lost dollars.
The program is Payment in Lieu of Taxes, established in 1976 by the federal government to compensate states with large swaths of federally held land that is unable to generate property tax revenue. Those would be lands such as national parks, acreage managed by the Bureau of Land Management and the Forest Service.
Although the program since 1977 has distributed $6.7 billion to mostly Western states to compensate them for lost revenue that could be directed to schools, roads and emergency services like police and fire, payments over the years have declined, remained stagnant or increased very little.
This coming year's proposed budget for the U.S. Department of the Interior calls for a 15 percent reduction in those payments, and in 2014, the disbursements were not approved until midway through the year.
It's an issue of equal justice for both sides of Utah's political aisle on Capitol Hill.
"We need a fair deal," said House Minority Leader Brian King, D-Salt Lake City.
HCR19, sponsored by Rep. Ken Ivory, R-West Jordan, calls on the U.S. president, Congress and the Utah delegation to ensure timely and full payments to rural counties to make up for that loss of revenue, even noting that instead of Payment in Lieu of Taxes, it has recently equated to "Pennies in Lieu of Taxes."
"We teach our children a promise is a promise," Ivory said, but noted that promise has not been fulfilled.
He also emphasized that the resolution is a public lands measure that draws on bipartisan support among lawmakers, with Sen. Jim Dabakis, D-Salt Lake City, carrying the resolution in the Senate. It passed 73-0 in the House and 23-0 in the Senate.
Ivory's HB357 also received unanimous support on the House floor, passing 70-0 and receiving a 23-0 vote in the Senate. It calls on the state's Commission on Federalism to evaluate the impacts of federal payments in lieu of taxes to the state, with a hearing that draws on those impacts from shortfalls that affect schools, cities and other entities.
Those promised revenues that have dwindled and fallen short are having serious impacts throughout Utah, lawmakers agreed.
"We are in a red-headed stepchild situation," said Rep. Mike Noel, R-Kanab. "We really don't get the benefit of property taxes in this state."
Around the West, political leaders have chafed at the continuing shortfalls.
In 2017, the Western Governors Association passed a resolution on the issue, urging the federal government to deliver fair compensation because of the critical nature the funds provide for basic local government services that could otherwise be derived from property tax revenue.
Matt Anderson, director of the Sutherland Institute's Coalition for Self-Government in the West, said he hopes Ivory's HB357 starts a national conversation on the issue.
"The (Payment in Lieu of Taxes) program is not working in the West,” Anderson said. “The program was designed to compensate rural communities and their schools for lost property tax revenue due to federal land ownership. While there is disagreement about how much more funding rural communities should receive from these payments, both sides of the aisle recognize that Utah and our schoolchildren are being shortchanged."
