by Matie Belle Lakish
After almost four years of controversy over Secure Rural Schools and Community Self-Determination Act (SRS) funds, schools and commissioners came together to work out a plan that provides the best funding options for both groups. They also achieved an understanding that will help them move forward in a coordinated way in future years, provided the SRS funds are renewed by the federal government.
Four years ago, when SRS was fully funded for the first time, Saguache County learned it was eligible to receive over 3 million dollars that could be used for roads and bridges and schools. However, in order to receive these funds, the county had to give up its normal PILT (Payment in Lieu of Taxes) funding.
Now, four years later, the Road and Bridge Department has updated equipment, but other county departments are suffering. The county’s information system, for instance, is archaic (in electronic terms) and, in September, the entire county government was in chaos for over a week because of computer melt-downs. Public Health has had to lay off workers, as have the Sheriff’s and other departments. Infrastructure needs repair or replacement.
The current controversy began when county officials learned that SRS funds had been appropriated by Congress for one more year. However, because the county’s General Fund has suffered for the last three years, commissioners were reluctant to take the SRS restricted funds again instead of PILT.
Our local schools, however, have come to rely on the SRS funding to supplement diminished state funds and local tax revenues, and were unprepared to accept a shortfall of over a million dollars if the county did not receive SRS funds for this year. Superintendents from Moffat, Center, and Saguache schools, as well as school board members, parents, and Director Kathryn Brady from the Charter School attended the September 3 meeting to help the commissioners understand their issues. They asked for more time to work out some type of arrangement that would fund both schools and the county’s General Fund.
Commissioners’ understanding, as of September 3rd, was that if they gave a large portion of their share of SRS to schools that they could make up a portion of the difference with PILT. Thus, at the September 3 meeting, they voted to give the schools $500,000 of the county’s SRS funds, plus 25% from forest product sales, believing that the county’s PILT would be proportionally increased.
However, their calculations did not work out, and Commissioners Mike Spearman and Sam Pace spent the next several days exploring options with Jarrod Biggs of the Department of Local Affairs (DOLA). With his help, they reached the best formula for the county and schools, and on September 13, Pace made a motion “to revisit the decision to give the school districts $500,000 made on September 4 and to give the schools $789,688.00 (all of Title I funds) of the payment given in January 2012, to be paid by September 30, 2012.” Linda Joseph seconded the motion. The vote was three Ayes.
The final decision gives 85% of the SRS funds for 2011 to schools ($1,974,220) 15% to Title III for Forest Service projects ($116,131), and no SRS funds to Saguache County for roads. By giving all the SRS funds to schools, Saguache County can take a full PILT payment as well, rather than having to choose one or the other. Although PILT ($823,194 for 2013) allows the county to fund other county departments, it will be only 42% of the amount the county would have received under SRS. The Road and Bridge Department’s 2013 budget will be cut by 1.2 million dollars.
Some background: There are three types of funding that counties can receive to help compensate for lack of tax revenues from public lands. Saguache County is around 72% public land, most of it Forest Service (FS) or Bureau of Land Management (BLM) land. The first type is known as the 25% fund. This is 25% of the revenues the FS collects from the sale of forest products, such as timber sales. For Saguache County, the 25% fund would yield about $84,000 for 2012.
A second type of payment is PILT, or Payment in Lieu of Taxes. This varies from year to year, as it is appropriated by Congress, and is usually not fully funded. Counties usually receive a base amount, and then may receive additional funds up to about twice the base amount. For Saguache County, the base amount for the next fiscal year will be $488,238.61. Because of the commissioners’ choice, the county will receive an additional $334,954.99. This PILT payment is not restricted. It can be used for any purpose through the General Fund.
The third type of funding is SRS. The legislation authorizing SRS was enacted in 2000, but it was never fully funded until 2008. If a county government chooses SRS, it must forego the other types of federal funding, unless, as in this case, it gives all of the funding to schools.
In 2009, taking the SRS funds was not a difficult decision for the county. The road equipment was archaic and required frequent maintenance. Although the county Road and Bridge Department receives Highway User Tax Fund (HUTF) from gas taxes, that doesn’t cover equipment and many other department needs. Over the first three years of SRS, Saguache County Road and Bridge was able to update its equipment and vehicles significantly, as well as do additional road maintenance and paving. After the first year, schools also received a significant share of the funding. However, priorities have changed over the last four years, and now other departments need their share.
There is no guarantee that SRS will be funded in the future. The latest funding was for one year only, and the up-coming national election will likely influence future appropriations. However, both schools and the county are now fully aware of this, and will have to plan accordingly. In the meantime, schools have received a windfall and the county will be able to boost spending to the General Fund, which will allow some upgrades to equipment and staffing.
The decision will impact only the payments received for the 2012 fiscal year. Commissioners were constrained by a September 30 deadline to make decisions for 2012. Payments will be received early in 2013. A new Board of County Commissioners will be seated in January, and they will be responsible for the decision in future years, should the SRS funds be re-allocated by Congress. However, the schools have tentatively agreed to take 50% of the funds for 2013, if reallocation occurs and the new commissioners choose SRS funds.
Linda Joseph explained to school representatives and citizens that funding allocations within the county need to be balanced. Some years SRS funds can be used to maximize funding for roads and schools, but other years the General Fund needs more attention. She expressed her appreciation that both the schools’ and county’s funding could benefit from the current decision.
Moffat Superintendent Kirk Banghart, who represented the county’s five school districts, said, “I appreciate, for the students of the county, the action that you took. You have the support of the schools. People need to know what a courageous decision this was. We appreciate you.”