County gets $2.84M to offset federal acreage

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Flathead County will receive $2.84 million this year from the federal government under a long-running program that compensates local governments for nontaxable federal land.

The appropriation is roughly $600,000 less than last year’s payment to Flathead County.

Montana’s slice of the payments-in-lieu-of-taxes pie is $33.9 million, down from the 2018 state allocation of $40 million.

A total of $514 million will be distributed to more than 1,900 local governments around the United States to help pay for critical needs such as emergency response, public safety, public schools, housing, social services and infrastructure.

Flathead County’s payments-in-lieu allocation is the largest among Montana counties. Ravalli County will receive just over $2.5 million this year; Lewis and Clark County will get $2.6 million; and Missoula County will get just under $2 million. Neighboring Lincoln County is getting $680,555, while Sanders County will receive $544,846.

About 70 percent of Flathead County’s 2.44 million acres is federally owned.

Each year Flathead County earmarks $500,000 of the payments-in-lieu money to the road department.

For the coming fiscal year, the county commissioners have directed a $1 million transfer of payment-in-lieu money to the county’s jail fund, according to county Administrator Mike Pence. In recent years the county has set aside a portion of the payments-in-lieu money for construction of a new jail.

The rest of this year’s allocation will remain in the county’s payment-in-lieu-of-taxes fund until it’s designated for specific needs, he said.

The federal money helped pay for the South Campus Building and the renovation of the old jail facility that is now the county Attorney’s office complex.

Also in recent years, Flathead County used the federal money for projects such as main Courthouse renovation, construction of a parking lot next to the Earl Bennett Building and to help buy the building that houses the Montana State University Extension Service and 4-H program.

Tax-exempt federal lands include those administered by the Bureau of Land Management, the National Park Service, the U.S. Fish and Wildlife Service, the U.S. Forest and for federal water projects and some military installations.

Since payments-in-lieu-of-taxes payments began in 1977, the Department of the Interior has distributed nearly $9.2 billion to states and the District of Columbia, Puerto Rico, Guam and the Virgin Islands.

The federal government collects in excess of $11.9 billion in revenue annually from commercial use of public lands, such as oil and gas leasing, livestock grazing and timber harvesting, the Department of the Interior said in a press release.

Using a statutory formula, the annual payments to local governments are computed based on the number of acres of federal land within each county or jurisdiction and on the population of that county or jurisdiction. Individual county payments may vary from year to year as a result of changes in acreage data, which is updated annually by the federal agency administering the land; prior-year federal revenue sharing payments reported annually by the governor of each state; and population data, which is updated using information from the U.S. Census Bureau, the Interior Department said.

News Editor Lynnette Hintze may be reached at 758-4421 or

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