Federal budget cuts hit Wyoming counties

2013-03-29T22:30:00Z 2013-03-29T23:48:32Z Federal budget cuts hit Wyoming countiesBy JOAN BARRON Casper Star-Tribune The Billings Gazette
March 29, 2013 10:30 pm  • 

CHEYENNE, Wyo. — The tentacles of federal budget cuts triggered by sequestration extend to Wyoming's 23 counties.

County governments will see a 5.1 percent cut in their Payment In Lieu of Taxes checks this year and up to 40 percent next year, said Robert Rolston, a Sheridan County commissioner and president of the Wyoming Association of County Commissioners.

The payments make up for lost property taxes on nontaxable federal property, lands and forests.

The amount of PILT payments received by Wyoming counties, he said, has declined from $25.6 million in 2011 to $24.4 million in 2013 and may plummet to $10 million in 2014.

In a March 6 letter to county commissioners, Secretary of the Interior Ken Salazar said that because of the failure of Congress to reach a deal on balanced deficit reduction to avoid sequestration, President Barack Obama was compelled to issue a sequestration order canceling about $85 billion in federal spending for the rest of the federal fiscal year, which ends Sept. 30.

In 2012, the PILT payments totaled $393 million to more than 1,850 counties. The 5.1 percent cut will reduce payments by about $20 million.

"If sequestration is subsequently corrected, we would issue payments to counties with the balance of the PILT payments due to local governments," Salazar wrote.

Rolston said county commissioners were in Washington, D.C., about a month ago and learned about the reduction, including the 40 percent cut planned for 2014.

They received no guarantee they will continue to get PILT money.

"They may just drop the program," he said Friday.

The payments are not a subsidy but represent a substitute payment for property taxes. If a private property owner fails to pay a property tax bill, the county can sell the property from the courthouse steps.

"You can't sell the Big Horn National Forest from the steps of the state capitol," Rolston said.

Payments to Sheridan County will drop from $993,000 in 2012 to $886,000 this year.

Harder hit will be counties in the Big Horn Basin -- Hot Springs, Washakie and Park.

PILT money makes up about 28 percent of the budgets of those counties, Rolston said.

The payments go to the counties' general funds and are spent on general operating expenses.

Some of the other counties do not receive that much PILT money. Laramie County, for example, received $22,000 in 2011.

Earlier this week, the state received notice of a $53 million cut in the state's share of federal mineral royalties over five months.

The state receives nearly $1 billion a year in federal mineral royalties paid on mineral production on federal lands within Wyoming.

The $53 million will affect three accounts -- the School Foundation program, the school construction program and the Budget Reserve Account.

The $53 million includes a reduction in the state's share of coal bonus money as well, said Treasurer Mark Gordon.

Gordon, Gov. Matt Mead and Wyoming's congressional delegation said they were outraged by the action because the revenue belongs to Wyoming by law.

In addition, the federal government notified the Department of Environmental Quality in February of a 10 percent cut in the state's share of Abandoned Mine Reclamation funds. That move would reduce the state's payment from $15 million per year to $13.5 million.

Sen Eli Bebout, R-Riverton, the co-chair of the Joint Appropriations Committee, said Friday the DEQ is protesting the cut because it is nearly double what other agencies are experiencing.

He noted that an earlier congressional cut will cost the state $700 million in AML money over a decade.

"This is just as bad. This is done by government," Bebout said. The protest letter sent by the DEQ said the federal government shouldn't take any more AML money because it already was getting $700 million of the state's share.

"I think it will happen anyway," Bebout said. "The issue is if it's 5.1 percent or 10 percent."

He said he saw a letter from federal officials that cited the authority they have for withholding the federal mineral royalty money.

He said a lawsuit is possible but the situation could change before the case got through the courts.

In terms of dealing with the state budget in the next budget cycle, Bebout said he believes the Legislature will be able to cover the shortfall.

"It's just frustrating," he said. "Typically they try to make the reduction where the citizens make the most outcry."

Meanwhile, the Department of Defense has pulled back on some cuts forced on it by the sequester. The department restored tuition assistance for Wyoming National Guard members and also reduced from 22 to 14 the number of furlough days required of civilian military personnel.

The furloughs will affect 430 civilian full-time technicians in the Wyoming National Guard assigned primarily in Cheyenne or Camp Guernsey.

The furloughs will affect 700,000 military personnel in all, according to published reports. The change followed congressional approval last week of a defense appropriations bill that prevented an additional $6 billion in cuts, ordered under sequestration, from taking effect.

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