EDITORIAL: ‘Payments in lieu of taxes’ are a colossal ripoff

The federal government controls almost 28 percent of the nation’s land, including a whopping 80 percent of Nevada. In return for taking vast tracts of land off the property tax rolls, Washington sends “payments in lieu of taxes” to eligible counties that have public lands within their boundaries. That includes all of Nevada’s 17 counties.

The payments, calculated through a complex formula, reflect the fact that “counties that host public lands bear the full cost of the services that make those lands accessible, productive and safe — such as roads and bridges, law enforcement, emergency response and fire protection,” the National Association of Counties explains. In fiscal 2025, the association reports, the feds distributed a total of $645 million to 62 percent of all the nation’s counties.

This week, Nevada’s two Democratic senators issued a joint news release taking credit for securing more than $35.6 million for Nevada counties under the program, which existed long before either one of them took office.

“One of my top priorities is to ensure that our rural communities have the federal funding they need to support critical services, such as public safety and education,” said Sen. Jacky Rosen, adding, “I’ll keep fighting to ensure communities in rural Nevada get their fair share of federal funding.”

Sen. Catherine Cortez Masto was equally enthusiastic. “For counties with a high percentage of public lands, like many in Nevada, PILT payments are a lifeline,” she said in the release. “I’ll never stop working to ensure that families in rural Nevada get the support that the federal government owes them.”

What the release fails to note is that “payments in lieu of taxes” are not based on market rates and “generally yield far less revenue for local government” than actual property taxes levied on private owners, the Department of the Interior acknowledges. In fact, one might say they’re a colossal ripoff. And Nevada, in general, receives far less per acre in such payments than most other Western states, primarily because of its sparse rural population.

Yet any effort to sell off even a minuscule portion of the federal government’s vast real estate holdings in Nevada is met with hysteria from various special interests who respond as if Yellowstone were going on the auction block.

That’s too bad. Because if Sens. Cortez Masto and Rosen want to help rural Nevada counties raise money for “critical services,” they would be better off weaning them off federal dependency and instead pushing to get more non-sensitive government land across the state into private hands, enhancing the tax base of these cash-starved counties and providing them with a far more lucrative revenue source.