Counties collect Payment in Lieu of Taxes for state-owned land not subject to property tax
Minnesota’s 87 counties are the beneficiaries of $35.7 million in aid that helps support public lands and provides a critical link in the state’s public recreation system, according to the Department of Natural Resources.
Annual payments for Payment in Lieu of Taxes (PILT), a property tax relief program that offsets revenues not collected on public lands, recently were distributed by the state’s Department of Revenue.
Counties have received PILT payments annually since 1979 in place of property taxes on 5.6 million acres of state-managed lands and 2.8 million acres of county-managed tax-forfeited lands. Dollars for the payments come from the state’s general fund.
“PILT payments are an important source of revenue to those Minnesota counties and townships that have public lands within their borders, but the benefits of public lands go far beyond these payments,” said DNR Commissioner Tom Landwehr.
“Public-owned lands contribute significantly to local economies by supporting timber and mineral production while providing wild places for recreation and tourism, habitat for hundreds of species of fish and wildlife, and important ecological services like clean air and water,” Landwehr said. “These public-owned lands are part of the social and economic fabric of Minnesota.
Counties received anywhere from $18,346 in Red Lake County up to $3,792,466 in St. Louis County. The 2018 PILT payments represent a $3.6 million increase over those made in 2017, largely due to legislation that increased the per-acre payment from $1.50 to $2 per acre on nearly 7 million acres of natural resources lands and county-managed tax-forfeited lands.
The state makes PILT payments on public lands including state parks and forests, school trust lands, scientific and natural areas and wildlife management areas, Consolidated-Conservation lands as well as county-managed tax-forfeited lands. Payment rates vary according to land type and range from $2 per acre, to the greater of $5.133 per acre or three-quarters of 1 percent of appraised value. Payment for Lake Vermilion Soudan Underground Mine State Park is assessed at 1.5 percent of the appraised value of the land.
St. Louis County Commissioner Frank Jewell of Duluth thanked legislators for their recent boost in PILT payments to counties.
“We are blessed with an abundance of public land in St. Louis County, but those lands are exempt from county property taxation,” Jewell said. “PILT helps reduce the strain on county budgets by replacing some of that uncollected tax revenue. It’s a very positive development for our county and decreases the property tax impact on our citizens.”
A breakdown of PILT payments for each county is posted on the Department of Revenue website at www.revenue.state.mn.us/local_gov/prop_tax_admin/aclb/pilt_bycounty.pdf
More information about Minnesota’s public land portfolio, PILT payments, and a brief history of major public land transactions is available on the DNR website at mndnr.gov/publiclands.