County allocates Forest Reserve Payments to local school districts
Ask anyone who has dealt with funding streams from the federal government for a little while and they will tell you that calling the system “complex” is an understatement.
The federal government provides funding to towns, cities, counties and states through a myriad of direct funding streams, grant programs, supplementary budget measures and emergency aid. The amount of funding received can vary greatly between entities and is dependent upon too many variables to attempt to list in a single news article. Often times the funds provided to various organizations, such as school districts, are provided through pass-through entities such as state or county governments.
Many counties in the western US, especially those west of the continental divide, contain large swaths of ostensibly publicly owned land upon which no property taxes can be levied. The federal government recognizes that counties with large percentages of publicly held land can find themselves in financial predicaments because of the inability to raise revenue from taxation of the land. In recognition of those realities the federal government provides Forest Reserve Payments to counties that qualify.
Counties in turn provide local school districts with anywhere between 25 percent and 100 percent of those Forest Reserve Payments to apply to school operational costs. Last week the Grand County Board of County Commissioners (GCBOCC) choose to provide 100 percent of the Forest Reserve Payments for the year to the two school districts within Grand County, East and West Grand.
This is the second consecutive year the GCBOCC has chosen to provide 100 percent of the Forest Reserve monies to the school districts. The County is required by statute to provide at least 25 percent of the Forest Reserve Payments to the districts.
The funds are dispersed between the two districts proportionally based on the percentage of the overall student population that is enrolled in each district. Currently roughly 75 percent of Grand County’s K-12 student population attends East Grand while 25 percent attends West Grand. Each year East Grand receives roughly 75 percent of the Forest Reserve Payments the County provides to the districts with around 25 percent going to West Grand.
The funds the federal government provides through the Forest Reserve Payment program are derived from leases and fees associated with public lands in individual counties. According to Donette Schmiedbauer, the East Grand School District’s Finance Director, counties with ski resorts, such as Grand and Routt Counties, receive more in Forest Reserve Payments than counties without ski resorts.
Alongside the Forest Reserve Payment program the federal government also operates an extremely complex direct payment program for counties called PILT, or Payments In Lieu of Taxes. Typically with PILT funding each county has a predetermined ceiling on the amount of federal funding they will receive. The amount of PILT funding received by various counties decreases as other forms of federal funding are accepted, such as Forest Reserve Payments.
Because PILT operates with a baseline ceiling from which funds are subtracted based on how much funding each county receives Forest Reserve Payments made to the various school districts are typically backfilled each year through PILT, though there is no guarantee that counties will be made whole after allocating the Forest Reserve funds to the districts. Payments from PILT to counties operate on a two-year time lag from when other federal funds are received, meaning the county will not officially know if their Forest Reserve Payments allocated to the local school districts will be covered until two-years after the decision is made.
Schmiedbauer and other officials from the EGSD recently lobbied the GCBOCC hard for the allocation of the full 100 percent of Forest Reserve Payments to the school districts, citing their belief that the county would be made whole through PILT. This year and last year the County chose to provide the school districts with 100 percent of the Forest Reserve Payments but for the three-years prior to that the county retained significant portions of the Payments, totaling a bit under $500,000 each year.
In Schmiedbauer’s view those funds would have been backfilled by the federal government through PILT if the county had chosen to allocate 100 percent of the Forest Reserve Payments to the Districts. The GCBOCC will revisit the issue again next year, as they do every year, and local school districts will once again lobby for full allocation of Forest Reserve Payments to the districts. Given that Grand County allocated 100 percent of the Forest Reserve Payments two years ago many individuals in the county will be watching PILT funding closely to see if Grand County is made whole.
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