Borough gets federal funds at critical time

With a crunch on spending at the state level, officials from the Mat-Su Borough were pleased to know they'd be receiving a little additional funding from the federal government.

The borough announced this week that it received an additional $233,000 in payment in lieu of taxes, or PILT funding.

"I have been informed by Senator Lisa Murkowski that PILT funds will increase," Mat-Su Borough Mayor Tim Anderson said in a press release last week. "

This additional funding comes at a most critical time for the borough as we work to absorb the funding cuts made by state government. I am thankful that Senator Murkowski has provided Alaska's municipalities with additional funds at this time."

Murkowski announced recently that 27 Alaska boroughs, areas and communities would receive a nearly nine-percent jump in federal aid as a result of changes in the PILT program.

The changes, according to the Department of Interior's Bureau of Land Management, were electronically transferred to Alaska communities to help them compensate for services they provide to non-taxable federal lands within their boundaries.

"The PILT program is very important to Alaska communities since so much of Alaska -- nearly 66 percent at present -- is under federal control. This program helps communities deal with the services they need to provide because of federal lands and helps to offset the loss of tax and economic development revenue that often results from federal land ownership," Murkowski said in a press release.

Anderson, Friday, said the increase was due to a change in the funding formula used to compensate states.

"We have a set amount of federal land in the borough," Anderson said. "Congress funds a formula for making PILT payments to all the states. This year, they increased that formula."

Anderson said the added money is a relief. About $700,000 in state revenue sharing and municipal assistance money generally received by the borough was cut this year, and the added PILT payments will help offset that loss.

Although the borough assembly hasn't designated the PILT money in any particular direction yet, Anderson said it's likely some of the money will go to offset the revenue sharing shortfall by being transferred into borough road service area accounts. Revenue sharing and municipal assistance money, he said, is generally split among those accounts, and pays for road maintenance and other such programs.

"Maybe at least part of the PILT money could restore that," Anderson said.

Alaska communities received just over $15 million in federal payments, compared to last year's funding of nearly $14 million. The $1.23 million increase, according to Murkowski's office, is distributed based on the amount of federal lands inside local boundaries.

And, according to her office, the Mat-Su, which received more than $1.8 million, was one of the biggest beneficiaries this year.

The Kenai Peninsula Borough received $1.8 million and Bethel was the third-largest recipient, taking home nearly $900,000.

According to information from Murkowski's office, the PILT program recognizes that boroughs and other local government entities with substantial acreage of federal land can't collect sufficient taxes to provide the needed services of would have to tax fewer residents at higher rates to provide services. The program, this year, is providing $218.2 million in aid to nearly 1,900 local governments to offset services costs on 264 million acres of federal land inside local boundaries.

The aid goes for lands administered by the BLM, for national forests, parks, wildlife refuges, federal water and military installations.

PILT payments are in addition to revenues from oil and gas leases, the sales of minerals and timber and other federal revenues derived from public lands. Since its creation, the PILT program has distributed $3.2 billion in aid to local governments.