Bill would increase payments in lieu of taxes for locals

A proposal under consideration in the state Senate that would require annual increases in state payments in lieu of taxes (PILT) to communities with property owned by the state Department of Natural Resources (DNR) is expected to be voted on in committee by the end of the month.

Senate Bills (SBs) 1021 and 1022 have received the attention of the Senate Natural Resources, Environment and Great Lakes Committee in recent weeks, but that panel as of press time had yet to report them to the full 38-member upper chamber for consideration.

Payments in lieu of taxes (PILT) are allocations by the state to local units of government instead of property taxes for the land owned by the state and administered by the DNR. The PILT program replaces some of the property tax revenues a municipality would collect on DNR land, which, like all government property, is tax-exempt.

Kendra Everett, legislative director for state Sen. Tom Casperson (R-Escanaba), a sponsor of one of the bills, said the senator is concerned about communities, particularly in the Upper Peninsula, that have significant chunks of their budgets reliant upon PILT, which have been reduced in recent years because there hasn’t been enough money in the state’s General Fund to make them in full.

“These communities in the UP are losing a huge amount of their tax base and are getting less revenue for services,” she said. “You have areas of the UP where the budgets are more than 10 percent or 15 percent dependent on the PILT payments alone.”

Casperson’s and state Sen. Darwin Booher’s (R-Evart) proposal would require annual increases of 5 percent or the rate of inflation, whichever is less, to the current $2 per-acre PILT rate. It would also require that the state make the payment in full, according to legislative analysts.

They added that state payments to local governments would increase by approximately $2.9 million for Fiscal Year (FY) 2012-13 if the proposal is enacted as currently drafted.

The payments would, however, still be subject to appropriation.

State Sen. Mike Kowall (R-Commerce, Highland, Milford, Walled Lake, Wixom, Wolverine Lake, White Lake, Orchard Lake, West Bloomfield), who serves on the Natural Resources, Environment and Great Lakes Committee, said that while the proposal would more noticeably affect communities in the Upper Peninsula, there would still be ramifications — albeit smaller — in west Oakland County.

“When you look at who responds to all the fire calls, emergency calls and police calls, it’s us, whether it’s Oakland County Sheriff’s (Department deputies) or White Lake Township because we have almost 4,000 acres in the Pontiac Lake Recreation Area and quite a few in the Highland Recreation Area,” he said. “We’re working with the DNR and the state of Michigan to try to speed that process up and to give (host communities) the amount of money they have coming to them.”

Milford Township Supervisor Don Green said the township received just over $13,000 in PILT each of the last two fiscal years on the township’s roughly 1,200 acres of state-owned land within the Highland and Proud Lake recreation areas.

Highland Township Supervisor Triscia Pilchowski said she doesn’t rely on PILT when developing the township’s annual spending plans.

“We took a big hit a few years ago and, quite frankly, at least in my mind, it’s not something that I depend on,” she said. “I don’t look for it.”

Everett said she expects a Natural Resources, Environment and Great Lakes Committee vote on the proposal by the end of the month.