Mineral County sends feds a tax bill

Missoulian – by Kim Briggeman

Mineral County has sent a tax bill to the U.S. Secretary of Agriculture, claiming the federal government has “failed its obligation” to citizens of the county.

“The loss of funding from the federal government has left Mineral County with no other alternative than to assess the Federal Government for their portion of the property taxes on the 640,183 acres they manage,” commissioners wrote to Secretary Sonny Perdue in a letter approved and mailed Friday.

It was accompanied by a bill for $445,337, the amount the Montana Department of Revenue came up with, upon the county’s request, as the “initial obligation owed to Mineral County.”

It’s a unique stab at a solution to a problem that many tree-rich, people-hungry counties in the West are facing. Few, however, are in such grim straits as Mineral County, with its population of just over 4,000 people, an unemployment rate of 7.9 percent that’s Montana’s fourth highest, and a poverty rate of 17.2 percent.

“It may or may not be taken seriously, but I think there’s a pretty good chance it will ring true with a lot of people about this dire situation we’re going to have to deal with sooner or later,” Roman Zylawy, chairman of the three-member commission, said Monday.

“I think the county is behind it, and I think the county needs it financially. It’s prudent to send it and at least get the dialogue going,” Denley Loge, a state legislator from St. Regis, said before Friday’s vote at the county courthouse in Superior.

Less than 8 percent of the land in Mineral County is in private, taxable ownership. The U.S. Forest Service under Perdue’s jurisdiction manages a whopping 82 percent of the rest.

That worked fine in the old days, when lumber mills were booming, and logging trucks and chainsaws ruled the mountains. The federal government paid its share through the Twenty-Five Percent Fund of 1908, which provided counties with one-quarter of the proceeds earned by national forests in their boundaries.

“Amended in 1976, the Payment in Lieu of Taxes (PILT) program was insufficiently funded from its inception,” Zylawy and fellow commissioners Laurie Johnston and Duane Simons wrote in the letter. “Furthermore, the Secure Rural Schools Act of 2000, established to offset the loss of the land management economy to rural schools and communities, has not currently been renewed.”

In its place, payments the past two years have reverted to the Twenty-Five Percent Fund. Zylawy said Secure Rural Schools was worth more than $1 million a year to Mineral County. Two-thirds of it went to the county for infrastructure needs, and the rest to the three school districts. The Twenty-Five Percent Fund provides a mere $66,000 because timber sales are minimal.

At Friday’s commission meeting, county planner Tim Read pointed out the inconsistency of PILT payments, which are divided between counties on a national forest in part based on population. On the Lolo National Forest, Missoula County, where few timber sales take place, received half again as much as Mineral County’s $66,000, even though the latter carried nearly two-thirds of the Lolo’s timber sales.

“There doesn’t seem to be any real rhyme or reason to it,” Read said.

“They should factor in the percentage (of federal land) in the county,” Johnston said. “It changes everything. Eighty-two percent is a completely different dynamic than when you’re at 20 percent, or 60 even.”

The commissioner letter to Perdue said that President Donald Trump has done “an admirable job defining and taking action on the ‘Bad Deals’ negotiated in the past on behalf of the United States.”

“This is a ‘Bad Deal’ for the rural communities in our country (and) must be renegotiated,” the letter said. “The choice to drastically decrease logging on public lands managed by the U.S. Forest Service has devastated our communities and economy. This tax assessment is the cost of that choice.”

The idea of taxing the agency that oversees the Forest Service has been bandied about in Mineral County for years, Zylawy said. It has come to a head following the stoppage of SRS funding in 2014 and behind the impetus of Carol Young. A member of the St. Regis School Board, Young laid a lot of the groundwork by investigating the devastating effect the current tax situation has on schools.

At a stop in Superior on his statewide tour last month, Sen. Steve Daines indicated support for the county’s plan.

“He realizes there’s a problem, too,” said Loge, who added Daines agreed to deliver the tax bill to Perdue himself.

“I will continue fighting for PILT funding and advocating for Montana counties like Mineral County who are frustrated with the uncertainty created with funding of the PILT and SRS programs,” Daines said Monday in an email to the Missoulian. “We must continue to work for responsible forest management reform to give counties long term certainty so they can maintain quality schools, protect public safety, and invest in roads and bridges.”

Zylawy said the county can’t operate under the current financial burden. The tax bill of $445,432 is a minimum assessment for the St. Regis School District that doesn’t take into account the likes of Forest Service parks, campgrounds and riverfront property.

More than $300,000 alone is designated for the schools, with $186,000 of that toward the St. Regis district school levy. Some $41,000 is on the public safety line item, in a county that closed its jail over the winter for lack of funds to pay detention officers.

“I’m not saying we need to bring back (full-scale) logging,” Zylawy said. “I don’t know if that’s the answer either. But we definitely need to steer the boat differently.”

“Our only optimism resides in your ability, as a cabinet member of President Trump, and that of our duly elected officials, to resolve this injustice,” the commissioners told Perdue. “Simply accept the responsibility for the land held by the federal government as any other taxpayer of Mineral County.”


4 thoughts on “Mineral County sends feds a tax bill

  1. If my tax burden is increased because my property is pretty, has a pretty view or is otherwise pleasing to the eye, why does the largest landholder in sooo many counties in the US (the Federal Government) pay zero assessed value property taxes??
    Isn’t the US Government prohibited from owning land, thereby sidestepping a taxable situation? They don’t technically “own” any land, they merely “manage” the raw materials and minerals for profit. Sounds like fenced in ownership to me!

    1. Fletcher v. Peck, 10 U.S. 87, 118-120 (1810) (The United States can have no title but what is derived from Georgia. … At the treaty of peace, there was no idea of a cession of land to the United States, by Great Britain. The bounds of the United States were fixed as the bounds of the several states had been before fixed. The United States did not claim land for the United States as a nation; they claimed only in right of the individual states. Great Britain yielded the principle of the royal right to disannex lands from the colonies, and acquiesced in the principle contended for by the United States, which was the old boundary of the several states. See Chief Justice Jay’s opinion in the case of Chisholm v. The State of Georgia, reported in a pamphlet published in 1793. The United States then had no title by the treaty of peace. She has since (viz. in 1788) declined accepting a cession of the territory from Georgia, not because the United States had already a title, but because the lands were too remote, &c. There is nothing in the constitution of the United States, which can give her a title.); http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=10&invol=87

  2. I just asked the Assessor/Treasurer of Pierce County, Washington what tax burden the Feds have regarding the view property they own, Mount Rainier National Park.
    There is no property tax on Federal property.
    we, the people, are forced into bi-annually paying exorbitant tax fees on our property, excess fees if our site contains natural beauty, while land the Federal Government owns and from which it extracts sizable incomes, is tax free!
    Soon to be illegal: asking questions of your county tax assessor.

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