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Federal funding changes for Pocahontas County

Pocahontas County will continue to receive two important allotments of federal funds, but another allotment has ended. The county will receive Payments in Lieu of Taxes (PILT) money and county schools will receive Twenty-Five Percent Act funding this year, but the county and schools will not receive Secure Rural Schools (SRS) program funds, because the program has expired. A question remains whether the PILT payment to the county will increase as a result of the loss of SRS money.

SRS and Twenty-Five Percent Act funding explained

In 1908, Congress passed the Twenty Five Percent Fund Act, which pays back 25 percent of National Forest receipts to counties with National Forest land, to be used only for local schools. The reasoning behind the payments is that counties do not receive property tax revenue from National Forest land, therefore a need exists to subsidize schools in counties with National Forest land.

During the late 1980s and early 1990s, timber sales on National Forest lands decreased and, in 1994, Congress created the SRS fund to provide additional money to counties with National Forest land. The SRS program included Title I money for local schools; Title II funding for conservation projects on federal land; and Title III funding, given to county governments for wildfire mitigation projects and projects to stimulate wise use of national forest resources. Counties receiving SRS money did not receive the Twenty-Five Percent Act payment.

The SRS program expired on September 30, 2014, and legislation to reauthorize the program does not exist. Pocahontas County will revert to payments under the Twenty-Five Percent Act, which is permanent legislation. The SRS program was, and the Twenty-Five Percent Act program is administered by the U.S. Forest Service of the U.S. Department of Agriculture.

Last year, the final year of SRS funding, Pocahontas County received $421,000 in Title I money for local schools. The county is programmed to receive $95,007 under the Twenty-Five Percent Act (before any reductions caused by sequestration), a reduction of $326,000.

Between 2002 and 2008, the Pocahontas County Commission received $729,571 in SRS Title III money, which was invested in the failed Pocahontas Woods business incubator project. The Pocahontas Woods board refunded $78,856 of that money when the facility closed in 2012.

Impact on local schools

The Pocahontas County school system will absorb a budget cut of more than $300,000 due to the expiration of the SRS program. Pocahontas County Board of Education President Emery Grimes said the process will be a difficult one.

“It’s just like your household income,” said Grimes. “If you don’t have that money coming in, you can’t put it back out. Anytime you lose $300,000 out of your budget, it’s going to have a serious impact, especially in a county this small.”

Grimes said Pocahontas County school administrators will propose any necessary program and personnel cuts, after which hearings will be conducted at the Board of Education.

“It’s up to the administration to figure out where the cuts will be and then they bring it to the board,” he said. “Any personnel affected will have a right to a hearing before the Board of Education.”

In last November’s election, Pocahontas County voters rejected a school levy by a more than two-to-one margin. Grimes said the levy will likely be on the ballot again.

“It really did better than I expected,” he said. “Everybody in the Board office was kind of discouraged about it. But I wasn’t, because I remember the last time when it got 20 percent of the vote. We saw it coming down the road because we were told, ‘this is the last year you’re going to get Secure Schools money.’ So we were trying to look to the future.

“But I don’t think parents and grandparents understood the impact of these cuts. I think you’re going to see the levy again down the road. I think if parents and grandparents understand the consequences of the loss of Secure Rural Schools money,
they’ll be more apt to vote for it.”

The Pocahontas Times contacted Superintendent of Schools Donald Bechtel’s office to request a statement on the impact of loss of SRS money, but Bechtel’s office did not respond to the request.

PILT program fully funded for 2015

The Payment in Lieu of Taxes (PILT) program provides payments to counties to offset losses in tax revenues due to the presence of tax-exempt federal land in their jurisdictions. The rationale for these payments is that counties with federal land do not receive property tax revenue from those lands, but provide services to them, including fire, emergency medical, solid waste and law enforcement services. Payments to counties are based on population and the amount of federal land in the county.

The PILT program was first signed into law in 1976 and is administered by the U.S. Department of the Interior. In 2008, the program was modified from a discretionary program, subject to annual appropriations, to a fully funded mandatory entitlement program. Counties may use PILT money for any governmental purpose and are not required to distribute any portion of the money to other governmental entities, such as the Board of Education.

Because Pocahontas County contains 310,950 acres of federal public land, the annual PILT payment has been an important source of income for the county government. In 2014, the county received $801,530 in PILT money, the highest amount in West Virginia, representing approximately 15 percent of the county budget. Randolph County received the second-highest amount of $522,795.

According to a National Association of Counties press release, Congress fully funded the PILT program for 2015. Official notice of the amount of PILT payments to individual counties has not been issued by the Department of the Interior. PILT payments are disbursed to counties in June.

According to the Department of Interior website, PILT payments to counties are reduced by the amount of funds received from other receipt-sharing programs, such as the SRS program and the Twenty-Five Percent Act. Therefore, Pocahontas County should expect to receive higher PILT payments in the future because of the loss of SRS funds.

On Monday, The Pocahontas Times contacted the Department of the Interior to request information on past PILT payments to Pocahontas County and whether future PILT payments will be increased due to the loss of SRS funds. The Pocahontas Times’ questions were referred to Senior Public Affairs Officer Frank Quimby, with the Department’s Washington, D.C., office. The response from the Department will be reported when it becomes available.

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