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Spokane, Washington  Est. May 19, 1883

Sue Lani Madsen: State shouldn’t be buying more land at the expense of local tax collections

Sue Lani Madsen (Jesse Tinsley / The Spokesman-Review)

No one really enjoys paying taxes, including taxpayer-funded state agencies like the Washington Department of Fish and Wildlife (WDFW). The Legislature established a system called Payment in Lieu of Taxes (PILT) in the 1960s to relieve the pressure on county budgets as more and more land was purchased by the WDFW. In 1940, the WDFW owned 6,214 acres of land. By last year their portfolio had grown to 636,703 acres, with about 60,000 of those acres acquired in the last five years.

WDFW’s system for calculating PILT offered three options for setting rates. Two relied on flat rates set prior to 1984. These two options resulted in rates ranging from 70 cents to $1.59 per acre in the 10 counties with over 4,000 acres of WDFW land. The third option allowed calculation based on the same “open space” rates used to set taxes for private property owners. Seeking both parity for their taxpaying residents and more revenue, struggling counties started reassessing WDFW land in 2010 as “open space.”

The difference was staggering. The 2009 PILT calculation for Okanogan County was $81,922 for 69,322 acres of land. Under “open space” provisions, PILT rose to $479,890 for 76,649 acres of land in 2011. That’s an increase from $1.18 to $6.26 per acre.

Yakima County first recalculated its PILT bill in 2011. WDFW’s obligation went from $104,090 in 2009 for 81,350 acres to $400,089 for a slightly larger acreage in 2011. According to a recent report in the Yakima Herald-Republic, the same property in private hands and closed to the public would generate an estimated $800,000 in tax revenue. WDFW was still getting a good deal.

Like any landowner who receives notice of a higher tax bill after revaluation, WDFW was concerned. Unlike private landowners, the state had an option besides appealing to the county assessor. WDFW froze its payments at the 2009 level and set aside the higher bill.

Meanwhile, WDFW has continued to acquire more land and has plans to acquire more in the 2017-2019 biennium.

The WDFW website provides a map with links to the background materials for each of the 10 properties recommended by the WDFW executive team for purchase. There is also a link for public comments.

The most commonly used accounting method for sustainable decision making is the Triple Bottom Line. In order to be sustainable, a decision must balance the long-term social, environmental and financial interests of the community. The WDFW materials for each property summarize the case for the social and environmental value of taking these 10 properties off the tax rolls. We can comment on whether public or private ownership better serves our community values. What we can’t comment on is the financial leg of the Triple Bottom Line, because no financial information is provided.

A phone call to Olympia filled in some of the gaps. I told Clay Sprague, WDFW lands program manager, that from my point of view it didn’t make sense to buy more land when they weren’t paying full costs for the current land. His rueful response was “we’ve been hearing that a lot lately,” and he agreed they need to do a better job in the future of laying out the financial case for public comment.

WDFW does have estimates for operating costs, which average $8 per acre across the state. Figuring a ballpark number for future PILT payments is more complex, since each property valuation is different. The Department of Natural Resources pays PILT on open space valuation varying from 50 cents per acre for 81 acres in Grant County to $143.48 per acre for 170 acres in Spokane County. The statewide average PILT for DNR land is $9.67 per acre. The state is currently paying an average of $1.17 per acre for WDFW land. The difference leaves up to a $4.2 million hole in county budgets for land WDFW owns.

At a time when the Legislature is working to stretch tax money to cover education, continuing to expand WDFW’s land ownership and operating budget isn’t high on my list of priorities. Agree or not, comments are due Feb. 12.

Contact Sue Lani Madsen at rulingpen@gmail.com.