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Lawmakers look to shift PILT payments on NRTF property
Two bills recently introduced in the state House of Representatives would require the state Legislature to make appropriations from the Michigan Natural Resources Trust Fund (NRTF) each fiscal year to make full payments in lieu of taxes (PILT) on state-owned land purchased with NRTF funds.
PILT are payments made by the state to local units of government in lieu of property taxes for the land owned by the state and administered by the Department of Natural Resources (DNR).
Michigan law currently states that no more than 50 percent of the PILT on NRTF-purchased lands may be paid from the NRTF. The rest of the funds are supposed to come from the state’s General Fund through the state Department of Treasury. Meanwhile, school taxes are paid out of the School Aid Fund.
For the past few years, there hasn’t been enough money in the state’s General Fund to make these PILT payments to local governments, which consequently suffer a loss in revenue.
Therefore, state Rep. Joel Johnson (R-Clare) has sponsored House Bill (HB) 4577, requiring all PILT payments on NRTF-purchased land to be paid from the NRTF instead of half from the state’s General Fund.
“This is one more common sense change to make sure the state is prudent on land purchase decisions and that, if they do make land purchase decisions, they’re responsible and local governments receive full property taxes owed,” Johnson said.
“It makes more sense,” said Johnson Legislative Aide Ben Frederick. “If the trust fund wants to purchase property, then it should be responsible for paying taxes on it as opposed to the General Fund or School Aid Fund.”
Meanwhile, HB 4579, sponsored by state Rep. Frank Foster (R-Pellston), is a complementary bill that specifies how the PILT will be paid.
State Reps. Bill Rogers (R-Milford), Hugh Crawford (R-Walled Lake, Wixom), and Eileen Kowall (R-Highland, White Lake) are all co-sponsors of that bill.
Crawford said he believes they’re both “good bills,” as PILT dollars are supposed to replace the tax revenue local municipalities would’ve gotten from the state-owned property, and there isn’t enough in the General Fund to pay the rest of the PILTs.
“The bill, if I’m not mistaken, says to pay the other half out of the NRTF, as well. And the bottom line is that it ought to be paid — wherever it’s coming from,” Crawford said.
Kowall agreed.
“We have so many restricted funds in our budget that it makes it hard to make adjustments sometimes,” she said. “I don’t think general funds should be put into restricted funds. I’d much rather see all of the PILT came out of the DNR trust fund.”
According to a legislative analysis on the bills, based on fiscal year 2011 payments, the legislation would save the state’s General Fund approximately $515,000 a year by having the NRTF be responsible for the entire PILT payments.
2 Responses to Lawmakers look to shift PILT payments on NRTF property
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Bob Swartz
May 11, 2011 at 8:05 pm
As I understand this article and the charter of the MNRTF as well as the state constitution (Article 9, Section 35) these two bills are literally stealing the taxpayers’ money. It’s clear the the revenues (taxes, fees, etc) raised from mineral resources are to be used for the purchase and development of lands that are available to the public as well as scenic and/or environmentally significant and/or biologically important among other valuable criteria.
Not insignificant is that the MNRTF can receive private donations for the above purposes. I submit that this is further blatant theft from both Michigan residents and more importantly, the private donors who contributed their valuables to the state in good faith.
Now a few shyster politicians who are either too timid or too cruel to face the demands of balancing the budget in honorable ways are stooping to underhanded and deceptive methods.
Dear fellow readers: Please contact your state representatives and those who advocate for the public good to stop these terrible bills in their tracks. Thank you.
Geoffrey Owen
May 11, 2011 at 10:03 pm
These two bills are designed to break the law that is already in place. The law in place today requires that these taxes to local governments be paid from General Fund and the NRTF. The Republican sponsors want to eliminate the cost to the general fund, thereby making it look like an expense has been eliminated. The effect this has is like breaking in to the cookie jar where you have been saving for your kids future and spending it on gas to stretch your expenses from week to week.
These bills replace the revenue sharing feature of the present law with a version that takes our savings account and depletes it without a method of replacement. This is not fiscally responsible.
When do we start getting some solutions that make sense? And Bob, how do we call for action from our representatives when each and every one in this area is a sponsor on these bills?
Too bad our government allows the oil companies to rip Michigan residents off for $3 billion dollars this year due to the speculation on Wall Street. Too bad the economic impact of this expense on our tourism will cost us another $3 billion dollars.
Some of you may want to know my calculation. 80 cents a gallon on 6 million cars buying 15 gallons a week. Of course my $3 billion estimate was conservative and you’re lucky if you only need 15 gallons, but the 80 cents extra per gallon is legit.
We have the money we need and everything is possible. Politicians just don’t look further than the hand that feeds them. The only thing that separates Michigan from our esteemed past is our inability to look toward the future.
Taking our future to pay for short term solutions is not a remedy or solution for anything. Write your representative and tell them no thanks, but we want our land trust to remain intact and grow.
Can anyone comment on how the state is doing on selling park entry fees on your plates at the Secretary of States office? Where does that money go? The General Fund?