California's Payment-In-Lieu-of-Taxes (PILT) program was established in 1949 to offset adverse impacts to county property tax revenues that result when the State acquires private property for wildlife management areas. Fish & Game Code Section 1504 specifies that when income is derived directly from real property acquired and operated by the State as wildlife management areas, the Department of Fish & Wildlife (DFW) may annually pay the county in which the property is located an amount equal to the county taxes levied upon the property at the time title was transferred to the state.
The proposed 2017-18 State Budget provides PILT funding in the amount of $644,000 which is consistent with the last two state budget cycles. However, arrearages of approximately $8 million to counties remain unfunded.
The 2015-16 State Budget provided PILT funding for the year in the amount of $644,000. This was the first time in over a decade that the DFW made the annual PILT payment owed to the impacted counties. However, arrearages of approximately $8 million to counties remain unfunded.
Last year, the final State Budget Package reduced the $9.77 million appropriated by the Legislature to the DFW for the Management of Department Lands and Facilities to $1.77 million, thus eliminating the $8 million that was intended to be paid to the 36 counties for PILT. Additionally, budget language was included that made future PILT payments permissive by changing the ‘shall’ to ‘may’ in Fish & Game Code Section 1504.
The non-payment of the PILT arrearages has resulted in many counties, small counties in particular, struggling to provide needed services to county residents – many of which are mandated by the State.
Building upon prior efforts, RCRC sponsored Senate Bill 1188 by Senator McGuire (D-Healdsburg) during the last legislation session. Authored in conjunction with 15 other authors and co-authors, SB 1188 was a bi-partisan effort to amend Fish and Game Code to restore language that makes State Payment in Lieu of Taxes (PILT) payments to counties required as opposed to permissive. Disappointingly, the Governor vetoed SB 1188 despite unanimous support throughout the entire legislative process.
RCRC is currently sponsoring Senate Bill 58 by Senator McGuire (D-Healdsburg) which would, again, amend Fish and Game Code to restore language that makes State Payment in Lieu of Taxes (PILT) payments to counties required as opposed to permissive. However, this legislation would not take effect until January 1, 2019 and would help ensure that future Administrations follow through on the commitment to providing PILT funding to counties.
RCRC will continue to work through the legislative budget process to once again have the legislature appropriate the $8 million in PILT arrearages to 36 counties in the State Budget, as well as ensure that payments are made in future years.
Staff: Mary-Ann Warmerdam