Local Allocations of Payments In-Lieu of Taxes and Indirect State Aids: Their Contribution to Creating Negative Fiscal Impacts Attributed to Federal and State Wildlife Lands

Abstract

Since the passage of the National Forest Revenue Act of 1908 a continuing policy debate has raged over the fiscal impact of federal natural resource lands on local units of government. Generally, the literature have supported the conclusion that in total, local governments are not negatively impacted by the presence of federal or state natural resource lands. However, the U.S. Congress passed The Payments In-Lieu of Taxes Act of 1976 which increased the guaranteed minimal level of payments. States have been under similar pressure to increase their payments. These increases were based on local governments' insistence that the analytical results were incorrect and that severe negative fiscal impacts are associated with federal and state natural resource lands. These policy actions directly question the merits of fiscal impact evaluation. Either all previous evaluations are in error, or they have overlooked important dynamics of fiscal impacts. The discussion which follows contends previous studies have overlooked local factors which contribute significantly to the creation of negative fiscal impacts.