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Public land: Blessing or curse?

Jason Ferguson
Published: Thursday, August 30th, 2012

 

By Jason Ferguson
This is the first in a four part series studying the pros and cons of the hundreds of thousands of acres of government land in Custer County, as well as a look at all the money poured into and received from those lands.
Public land. Few know it better than Custer County residents.
There aren’t a huge number of counties in the U.S., and only two in the state of South Dakota, that have more public land than Custer County. According to estimates based on available Geographic Information Systems data, Custer County has the third lowest percentage of taxable land in the State of South Dakota, excluding reservation land.
Of the 997,652 acres of land in Custer County, only 340,560 acres are privately owned, or 34.14 percent. That means the bulk of the rest of the land—thousands upon thousands of acres—is held by a variety of government entities, including the Buffalo Gap National Grasslands, the State of South Dakota, Bureau of Land Management (BLM), U.S. Forest Service (USFS) and the National Park Service. Combined, the grasslands, BLM, USFS, Wind Cave National Park, Jewel Cave National Park and Custer State Park combine to make up almost 474,000 acres of public land. County and city owned land is not included in the estimate. In some instances, the state continues to pay property tax on land it has purchased. The state was invoiced for 49 parcels for 2011 taxes payable 2012 for a total of $7,414.33.
Just how much that public land benefits or detracts from the county is a matter of perspective. Every summer, thousands of tourists flock to Custer County because of public land, bringing with them money that bolsters the local economy. For some though, public land means more closed roads, costly emergency services, less tax money and more government intrusion into their lives. How much does government land help county residents? How much government land is too much? Depends on who you ask.
When the over 5,000 acres of the former Casey Ranch were sold to a trust and earmarked to be part of Wind Cave National Park, many people celebrated preservation of the land that would never be developed. Custer County Commissioner David Hazeltine was not one of them.
Hazeltine, a self-described “Forest Service brat,” had a father who worked for the Forest Service for 25 years, and he also worked for the Forest Service for a time. Hazeltine said he recognizes that all of the public land in the county is a boon for tourism, but does not like to see more and more land taken off the county tax rolls. Less land means less money for the county, which means less services the county can provide.
“When that property goes into a conservation holding company they are still paying taxes,”â��Hazeltine said. “The minute it gets finalized and goes to the federal government, they are exempt from taxes. I’m not against the process, except for the taking of the taxes from the people. The people of Custer County then have to pick up that tax burden.”
So how much money is the county losing in taxes?
Allison Jensen, Custer County’s director of equalization, said if one were to take the acreage of all land owned by the government and assess it at the lowest possible rate, the rate for agriculture land, the tax estimate would be an additional $1.895 million per year. The majority of that would come from the Forest Service, which would provide $1.595 million. Of the $1.8 million, $563,484 would go directly to county coffers. Since much of the land would be taxed as non-ag, those figures would more than likely skyrocket if it were all on the tax rolls.
“Plenty of those areas, if they were privately owned, would have amazingly expensive residential homes,”â��Jensen said.â��“That’s what people would put there. This is a bare-minium estimate and extremly wishful thinking. The government is never going to give us that ground back. But, we might not appreciate the place we live in if it was all taxable, because a lot of it would be off limits.”
Just because the government land is not taxable does not mean the county does not receive any reimbursement for it. What is know as the Payment in Lieu of Taxes (PILT)â��program compensates local jurisdictions for federal lands administered by agencies on behalf of the U.S. Forest Service and U.S. Army Corps of Engineers. 
Since counties and other local jurisdictions are prohibited from taxing federal lands, PILT payments help defray costs associated with maintaining services within their boundaries. All local emergency services respond to calls on federal land, even though the county does not receive taxes from the land.
The PILT act prescribes the formula to compute the annual payments based on acres and population, which are annually adjusted for inflation and census data. According to Custer County auditor Linda Nelson, PILTâ�� payments to local governments are based on the number of acres of federal entitlement land within each county. Federal entitlement lands include lands within the national forest and national park systems, those managed by the BLM, those affected by Corps of Engineers and Bureau of Reclamation water resources development projects and certain other federal lands. 
Individual county payments may increase or decrease from the prior year as a result of changes to acreage data, which is updated annually by the federal agency adminstering the land, and population data updated by the Census Bureau. PILT�payments have fluctuated from as low as $127,000 in 2003 to $493,000 in 2011.
Nelson said prior to 2008, the county received only a percentage of the calculated amount. The Emergency Economic Stabilization Act of 2008 authorized full funding for PILT�beginning in 2008 through 2012.
Hazeltine said he has crunched the numbers and found over the past six years the county has received around 82 cents per acre from PILT. He argues that if the land would have remained private over that same period of time, it would have meant $1.75 per acre, meaning the county lost 93 cents per acre.
Hazeltine did say since 2008 the loss has only been 50 cents per acre, and praised the public lands for being a huge positive for tourism. He points out, however, that Custer County does not benefit as much from tourism, as it does not get any of the sales tax money raised from tourism.
“Our problem is, tourism doesn’t affect (the county),”â��he said.â��“It’s a benefit to the community and business people, but as far as the county is concerned (providing services to public land) costs us more money.”
Next week: How government land affects the school system.

Public land. Few know it better than Custer County residents.

There aren’t a huge number of counties in the U.S., and only two in the state of South Dakota, that have more public land than Custer County. According to estimates based on available Geographic Information Systems data, Custer County has the third lowest percentage of taxable land in the State of South Dakota, excluding reservation land.

Of the 997,652 acres of land in Custer County, only 340,560 acres are privately owned, or 34.14 percent. That means the bulk of the rest of the land—thousands upon thousands of acres—is held by a variety of government entities, including the Buffalo Gap National Grasslands, the State of South Dakota, Bureau of Land Management (BLM), U.S. Forest Service (USFS) and the National Park Service. Combined, the grasslands, BLM, USFS, Wind Cave National Park, Jewel Cave National Park and Custer State Park combine to make up almost 474,000 acres of public land. County and city owned land is not included in the estimate. In some instances, the state continues to pay property tax on land it has purchased. The state was invoiced for 49 parcels for 2011 taxes payable 2012 for a total of $7,414.33.

Just how much that public land benefits or detracts from the county is a matter of perspective. Every summer, thousands of tourists flock to Custer County because of public land, bringing with them money that bolsters the local economy. For some though, public land means more closed roads, costly emergency services, less tax money and more government intrusion into their lives. How much does government land help county residents? How much government land is too much? Depends on who you ask.

When the over 5,000 acres of the former Casey Ranch were sold to a trust and earmarked to be part of Wind Cave National Park, many people celebrated preservation of the land that would never be developed. Custer County Commissioner David Hazeltine was not one of them.

Hazeltine, a self-described “Forest Service brat,” had a father who worked for the Forest Service for 25 years, and he also worked for the Forest Service for a time. Hazeltine said he recognizes that all of the public land in the county is a boon for tourism, but does not like to see more and more land taken off the county tax rolls. Less land means less money for the county, which means less services the county can provide.

“When that property goes into a conservation holding company they are still paying taxes,”â��Hazeltine said. “The minute it gets finalized and goes to the federal government, they are exempt from taxes. I’m not against the process, except for the taking of the taxes from the people. The people of Custer County then have to pick up that tax burden.”

So how much money is the county losing in taxes?

Allison Jensen, Custer County’s director of equalization, said if one were to take the acreage of all land owned by the government and assess it at the lowest possible rate, the rate for agriculture land, the tax estimate would be an additional $1.895 million per year. The majority of that would come from the Forest Service, which would provide $1.595 million. Of the $1.8 million, $563,484 would go directly to county coffers. Since much of the land would be taxed as non-ag, those figures would more than likely skyrocket if it were all on the tax rolls.

“Plenty of those areas, if they were privately owned, would have amazingly expensive residential homes,”â��Jensen said.â��“That’s what people would put there. This is a bare-minium estimate and extremly wishful thinking. The government is never going to give us that ground back. But, we might not appreciate the place we live in if it was all taxable, because a lot of it would be off limits.”

Just because the government land is not taxable does not mean the county does not receive any reimbursement for it. What is know as the Payment in Lieu of Taxes (PILT)â��program compensates local jurisdictions for federal lands administered by agencies on behalf of the U.S. Forest Service and U.S. Army Corps of Engineers. 

Since counties and other local jurisdictions are prohibited from taxing federal lands, PILT payments help defray costs associated with maintaining services within their boundaries. All local emergency services respond to calls on federal land, even though the county does not receive taxes from the land.

The PILT act prescribes the formula to compute the annual payments based on acres and population, which are annually adjusted for inflation and census data. According to Custer County auditor Linda Nelson, PILTâ�� payments to local governments are based on the number of acres of federal entitlement land within each county. Federal entitlement lands include lands within the national forest and national park systems, those managed by the BLM, those affected by Corps of Engineers and Bureau of Reclamation water resources development projects and certain other federal lands. 

Individual county payments may increase or decrease from the prior year as a result of changes to acreage data, which is updated annually by the federal agency adminstering the land, and population data updated by the Census Bureau. PILT�payments have fluctuated from as low as $127,000 in 2003 to $493,000 in 2011.

Nelson said prior to 2008, the county received only a percentage of the calculated amount. The Emergency Economic Stabilization Act of 2008 authorized full funding for PILT�beginning in 2008 through 2012.

Hazeltine said he has crunched the numbers and found over the past six years the county has received around 82 cents per acre from PILT. He argues that if the land would have remained private over that same period of time, it would have meant $1.75 per acre, meaning the county lost 93 cents per acre.

Hazeltine did say since 2008 the loss has only been 50 cents per acre, and praised the public lands for being a huge positive for tourism. He points out, however, that Custer County does not benefit as much from tourism, as it does not get any of the sales tax money raised from tourism.

“Our problem is, tourism doesn’t affect (the county),”â��he said.â��“It’s a benefit to the community and business people, but as far as the county is concerned (providing services to public land) costs us more money.”

Next week: How government land affects the school system.

 



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Current Comments

1 comments so far (post your own)
Allan
September 4th, 2012 at 06:16am

Interesting that this article is biased toward the burden on the county of the public land. Specifically with focus on the money lost from taxes...and not the benefits of the use (yes there are brief mentions of this). Your children will grow up living better lives because of the area they lived. They will understand how wonderful the space of the black hills is.

It is even more interesting that the editors of this paper lean heavily on the Republican side of the fence and advocate for less government spending, etc. Yet, when the tables turn and the government spending would benefit their area they want to tax the government on the land that the state or federal government is protecting for the use of the public. So let us tax the government and increase their spending to benefit the county.

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