The Effect Of Federal Compensation For Public Lands On Local Government Revenues In Idaho

Patricia Dailey, Stephen Cooke
1994 unpublished
In Idaho, federal forest and rangelands are 63% of the total area. The issues are whether federal compensation to local governments to support public services equals the private tax revenue forgone and whether this compensation changes with a change in resource use. Using tax equivalency ratios, the results shows that Idaho's local governments in 1991 were no worse off, on average, with public lands remaining in public ownership. Federal compensation returned more on forest than on grazing
more » ... han on grazing land. These results are sensitive to assumptions about forest land productivity. Measures of 'use equivalency' showed that federal compensation formulas created a financial self-interest for local government officials in extractive uses of public lands to maximize federal compensation received. Federal PILTs do not offset revenue sharing losses on a 1:1 bases as resource uses change. Senate bill S. 455 that changes the PILT funding levels is one example of a policy change that would help break the current structure of incentives that favor extractive uses of public land resources in Idaho.
doi:10.22004/ag.econ.305113 fatcat:5fhlmzputbhsjjiaivy4ridiuy