Garfield revenue from federal land jumps $2.4 million

Garfield County is welcoming a $2.4 million increase in revenue this year because of action the county took to try to avoid a major deduction in federal funding.

The county was notified late last week that it is receiving more than $2.8 million this year in payments in lieu of taxes, a program designed to compensate local governments for the presence of federal lands that aren’t charged taxes.

That’s a $2.4 million increase from what the county received last year, when its PILT payment was hit with a deduction for federal mineral lease revenue distributed at the county level for leasing for oil and gas development.

The county, and Mesa County, have formed special Federal Mineral Lease Districts that receive and distribute the lease revenue, the goal being for the counties to avoid being subject to the deduction. Mesa County also has benefited by that action, receiving a PILT payment of more than $3.1 million this year.

Garfield’s federal mineral lease district will distribute more than $3.6 million this year to applying governments.

Garfield and Mesa counties set up their federal mineral lease revenue based on state legislation passed in 2011. But whether the approach to avoiding PILT deductions would pass muster with the U.S. Department of Interior had remained in question, even after Interior received a legal opinion in support of it.

“They still have to accept that (legal advice) and act on it,” said Garfield County Manager Drew Gorgey.

He said the county didn’t know for sure whether Interior would go along with what the county was trying to do until the PILT distribution was announced.

“We relied on their own (legal) opinion and so we had faith that they would do so, but restoration of our PILT was the final piece of evidence,” he said.

The county had received about $400,000 a year for the last several years as Interior began deducting the federal mineral lease revenues from PILT.

Garfield County Commissioner John Martin said the county still has a request in for a full 2012 PILT payment due to the creation of the new district.

The additional funds come at a crucial time for Garfield commissioners, as they prepare for falling overall tax revenues and having to make budget cutbacks for 2014. Now the county is expecting the revenue drop to be offset a bit by an estimated $2.9 million to $3 million PILT payment next year, said county finance director Ann Driggers.

“It will definitely help us in regard to the 2014 budget,” Driggers told commissioners Monday.


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