PILT history

Koochiching County taxpayers will again get more than $2 million in tax burden relief, a benefit of having a large amount of public land.

Next year, Koochiching County will again receive $2.83 million from the state's Payment in Lieu of Taxes program. The county received about the same amount for 2019.

County Land Commissioner Nathan Heibel reported to The Journal this week that the money will be distributed, based on Minnesota law and the county budget, as follows:

  • Property tax reduction: $2.249 million
  • County Development Fund, derived from Consolidated Conservation lands: $78,892
  • ISD #362: $46,671
  • County Resource Development: $184,336
  • General revenue fund: $271,548

Heibel pointed out the public lands in the county provide a variety of benefits, with just one of them the PILT money.

"In Koochiching County, we have a high percentage of public land ownership overall that provides many benefits to many people," he said. "PILT is a great funding tool to help the county offset the costs of providing public services to what is otherwise tax-exempt land and helps to reduce the overall tax burden on local tax payers on lands that are there for everyone’s enjoyment."

The 2018 PILT payments to Minnesota's 87 counties represented a $3.6 million increase over those made in 2017, largely due to legislation that increased the per-acre payment from $1.50 to $2 per acre on nearly 7 million acres of natural resources lands and county-managed tax-forfeited lands.

Koochiching County is among all 87 counties in the state to which the Department of Revenue recently distributed the annual payments, totaling $35.9 million in 2019. Counties receive payments ranging from $21,443 in Red Lake County up to $3.79 million in St. Louis County.

PILT is a property tax relief program that offsets tax revenues not collected on public lands, the state reports. The concept of paying counties to offset tax loss from state-land ownership goes back to the 1930s.

Counties have received PILT payments annually since 1979 in place of property taxes on 5.6 million acres of state-managed lands and 2.8 million acres of county-managed tax-forfeited lands. Money for the payments comes from the state’s general fund.

The state makes PILT payments on public lands including state parks and forests, scientific and natural areas and wildlife management areas, school trust lands, Consolidated-Conservation lands as well as county-managed tax-forfeited lands. Even lands that could never be developed and placed on the tax rolls are included in PILT calculations used to compensate counties.

"PILT is an important and consistent revenue source for counties, but the benefits of public lands for Minnesotans go far beyond these annual payments," said Minnesota Department of Natural Resources Commissioner Sarah Strommen. "Public lands support local economies through timber and mineral production, provide space for outdoor recreation and tourism, create habitat for wildlife, and help provide clean air and water."

Every six years, counties provide the DNR updated assessed values for lands that determine PILT payments. The last reassessment took place in 2016. The assessment is done to figure the land values and types, which vary significantly in different parts of the state. An acre of swamp in northern Minnesota will not be assessed at the same value as an acre of prairie land in the agricultural part of the state.

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