Published Oct 16 2008
Though the bill itself has been widely called a “bailout” for Wall Street, New Mexico’s senators in Washington, D.C. are touting a portion of the Emergency Economic Stabilization Act that is expected to bring millions of dollars in federal funding into state and county coffers.
U.S. Senators Pete Domenici (R-NM) and Jeff Bingaman (D-NM) both voted for the Act. However, candidates to take Domenici’s seat, Representatives Tom Udall (D-NM) and Steve Pearce (R-NM), both voted against it in the House. It passed the House 263 to 171 and the Senate 74 to 25.
The part of the bill Bingaman and Domenici are emphasizing doesn’t center on governmental aid for mortgage lenders or banks, however. It promises more federal funding for states with public lands under the Payment in Lieu of Taxes and Secure Rural Schools and Community Self-Determination payment programs, which the federal Forest Service runs.
The Act extends the Rural Schools program another four years and increases payments to counties in the first year while decreasing them by 10 percent annually, according to a release from Domenici’s office. County Manager Lorenzo Valdez estimates payments to Rio Arriba County under the program will increase about threefold in the first year. Throughout the state, Bingaman and Domenici estimate payments will increase from less than $2.4 million annually to more than $21 million in 2008.
County Comptroller Mary Louise Martinez said the County received $221,000 in Rural Schools funding last year and $260,000 in 2006. Two-thirds of the funding is used for road maintenance, and the remaining 25 percent is allocated for emergency needs on public lands. The Forest Service began the initiative in 2000 to help counties hurt by declining logging revenues in federal lands.
Domenici Spokeswoman Hannah Vanderbush said Congress has been trying to eliminate Rural Schools funding for several years. She said whether it is renewed in four years “is anyone’s guess.”
“The program’s gonna phase out eventually,” she said.
Vanderbush said the funding from the Payment in Lieu of Taxes program fluctuates from year to year depending on the Congress, and the program has been chronically under-funded since it began in 1977. Both Bingaman and Domenici have pushed for more funding for it in the past. New Mexico is the biggest recipient in the country, getting about $22.8 million in each of the last two years. California is next in line, receiving about $21 million in 2006 and 2007, followed by Utah, with about $20 million each year.
The idea behind the program is that states and counties with lots of federal lands do not control the lands and do not collect property taxes on them the way they would if they were privately held.
The County got nearly $1.6 million last year and slightly less this year from the program. In the state, only Eddy, Otero, Chaves and Doña Ana counties received more than Rio Arriba the past two years. Martinez said the funds are treated like property taxes. They are unrestricted and go into the County’s general fund, but she said the County hasn’t gotten the full amount it should.
“PILT is to make up for the money that we lose,” she said. “We’re just getting the money we’re losing because of those tax-free properties.”
Because President George W. Bush has not yet signed the bill into law, Vanderbush said it is too early to estimate what full funding of the program will actually look like.
“The (Bureau of Land Management) is still figuring out how the payments are going to be sent out to the various counties,” she said.
Valdez said he thinks full funding would bring more than $2 million into the County.
Senate Energy and Natural Resources Committee staffer Frank Gladics said in his estimate, which he warned was more of a guess until the Bureau makes its assessment, funding for the program would increase by about a third over last year. Under that scenario, New Mexico could receive a total of $35 million.
Gladics said the formula is based on a number of factors, including how much money was allocated to an area the previous year, how much counties are getting paid under the Rural Schools program, if the population has changed or if any land has changed hands.
“The PILT formula’s really dynamic,” he said. “It moves money a little bit.”