PILT and Secure Rural Schools: Paying Counties for Land...

In June 2026 the Department of the Interior announced that it was sending rural counties about 733 million dollars, the largest set of these payments in the program's fifty-year history. The money goes to more than 1,900 local governments across 49 states and the District of Columbia, and it exists for a plain reason: those governments cannot collect property tax on the federal land inside their borders, yet they still have to build roads across it, run schools near it, and send a deputy or a search-and-rescue team onto it when something goes wrong. That is Payments in Lieu of Taxes, and it is one of two federal programs built to fill the same gap.

The record was not entirely good news, though. Interior itself said the increase over the prior year was driven "primarily by adjustments reflecting the 1-year lapse of the Secure Rural Schools program." The second program, the one for timber counties, had stalled in Congress, and because its payments are subtracted from the first program's formula, the first program mechanically went up. One rural-county program went dark and another set a record, for the same underlying reason. To understand why a lapse in one raises the other, you have to keep the two straight, which is the first thing almost everyone gets wrong.

Two programs, one problem

Start with the problem they share. When the federal government owns land inside a county, that acreage sits off the local tax rolls permanently. In much of the interior West a single county can be majority federal land, so the largest landholder in the jurisdiction is contributing nothing to the property-tax base while still generating the road, school, and emergency-service costs any large landholder would. Both programs are Congress's answer to that intergovernmental gap. But they were built at different times, by different departments, for different land, and they behave very differently.

Payments in Lieu of Taxes, or PILT, is the broad, older, relatively stable one. It is run by the Department of the Interior, it covers essentially all major federal land, and it reaches those 1,900-plus jurisdictions. Secure Rural Schools, or SRS, is the narrow, newer, chronically unstable one. It is run by the USDA Forest Service, it covers only national-forest and timber counties, it reaches a little over 700 of them, and it lives from one short-term reauthorization to the next. PILT is roughly 645 to 733 million dollars a year; SRS is roughly a third of that. Swapping the two, or their dollar figures, is the single most common error in writing about them.

PILT: who runs it and where the money goes

PILT was enacted in 1976 as Public Law 94-565, signed on October 20 of that year, and rewritten and recodified by Public Law 97-258 in September 1982; it now sits at Title 31 of the U.S. Code, sections 6901 through 6907. Interior administers it, and here is the part that trips people up: PILT covers Forest Service land too, even though the Forest Service belongs to the Agriculture Department, not Interior. The eligible "entitlement lands" span the Bureau of Land Management, the National Park Service, the Fish and Wildlife Service, and the Bureau of Reclamation, plus the Forest Service, the Army Corps of Engineers, and the Utah Reclamation Mitigation and Conservation Commission. One department writes the checks; the land belongs to many.

For fiscal 2025, Interior distributed about 644.8 million dollars. The precise figure in the FY2025 National Summary is 645,169,260 dollars authorized, of which 644,769,260 dollars went out as payments and 400,000 dollars covered administration, to more than 1,900 counties across 49 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. It was the largest annual payment in the program's history at the time, and the summary notes the program has paid out more than 12.6 billion dollars cumulatively since 1977. Then FY2026 broke the record again at 733 million.

The size of any one county's check comes out of a formula, not an appraisal. A county receives the greater of two alternatives, capped by its population. Under Alternative A it gets a per-acre rate times its entitlement acres, minus certain payments it received the prior year from other federal-land programs. Under Alternative B it gets a lower per-acre rate with no deduction. For fiscal 2025 those rates were 3.46 dollars an acre for Alternative A and 0.50 dollars an acre for Alternative B, according to the Congressional Research Service report on the program. The population ceiling slides from 232.73 dollars per person for the smallest counties, those at 5,000 people or fewer, down to 93.09 dollars per person once a county hits 50,000, where the credited population is capped. Those rates are adjusted for inflation every year, the FY2025 bump being 3.30 percent, so they are not fixed numbers but a fresh calculation each cycle.

That prior-year deduction under Alternative A is the hinge between the two programs. Interior subtracts certain federal-land payments a county already received, listed at 31 U.S.C. 6903, and the list includes Secure Rural Schools payments and the older 25-percent timber-receipt payments. Money that state law requires a county to pass through to school districts is exempt from the deduction, but the rest counts against the PILT calculation. So when SRS money falls, the amount PILT subtracts falls with it, and the PILT check rises. That is the whole mechanism behind the 2026 record: not more land or more need, but a smaller deduction because the sister program had lapsed.

PILT is usually described as "mandatory" funding now, but that has flipped over the program's life and is worth stating carefully. By the CRS accounting it was discretionary, and frequently prorated below its full formula amount, from 1976 through 2007; mandatory from 2008 through 2014; mixed in 2015; discretionary again in 2016 and 2017; and mandatory from 2018 onward. FY2025 funding continued under the Full-Year Continuing Appropriations and Extensions Act, 2025, signed March 15, 2025, though it is worth being precise: that act did not contain a specific PILT appropriation. PILT continued at its FY2024 mandatory level automatically because it is mandatory-funded, not because the act affirmatively provided the money. County groups such as the National Association of Counties, an advocacy organization, keep pressing for permanent full mandatory funding precisely because it is not permanently guaranteed.

SRS: the timber-county program that lives on a cliff

Secure Rural Schools is younger and narrower. It was created by the Secure Rural Schools and Community Self-Determination Act of 2000, Public Law 106-393, enacted October 30, 2000, and codified at Title 16, Chapter 90. It is administered by the USDA Forest Service, with one exception discussed below, which keeps it cleanly distinct from Interior-run PILT.

It replaced something older. For most of the twentieth century, timber counties were paid under the Act of May 23, 1908, which sent 25 percent of national-forest receipts, from timber, grazing, and the like, back to the counties for roads and schools. As logging on federal land fell sharply for policy and environmental reasons through the 1980s and 1990s, those receipts collapsed, and with them the county payments. SRS was the response: it decoupled the payment from current logging and stabilized it. The 1908 fallback is not a payment on current-year timber sales but an annual average of 25 percent of seven fiscal years of receipts, a rolling average that softens but does not reverse the long decline.

SRS money arrives in three titles. Title I funds county and state roads and schools. Title II funds special projects on the federal land itself, guided by local resource advisory committees. Title III funds county projects such as firewise community work, emergency services, and search-and-rescue. The totals are far smaller than PILT's. The Forest Service distributed about 230.6 million dollars in SRS funds for FY2025 to more than 700 counties, announced in April 2026. In FY2023 the program provided roughly 255 million dollars to more than 700 counties across 41 states, a figure that is consistent with the program's history but that I would treat as approximate rather than freshly re-verified.

Then comes the part that defines SRS: it keeps expiring. The original law ran only from 2001 through 2006, and every extension since has been another short-term patch. Its last full authorization ran through FY2023, which left FY2024 and FY2025 unfunded, a real lapse rather than a paperwork gap. Congress finally passed the Secure Rural Schools Reauthorization Act of 2025, Public Law 119-58, signed December 18, 2025. It authorized retroactive payments for FY2024 and FY2025 and reauthorized the program through FY2026, with final payments due in 2027. The retroactive FY2024 payments, about 182 million dollars, went out on February 20, 2026, roughly two years late. And the reauthorization only runs through FY2026, so as of the middle of 2026 the program is already back near its next expiration. It is not permanently fixed; it is on the same cliff it has been on since 2007.

The one clean exception to "Forest Service runs SRS" is western Oregon. For the O&C lands, the Oregon and California Railroad revested lands, it is the Bureau of Land Management, an Interior agency, that distributes the SRS payments across a set of western Oregon counties. In one round BLM sent 26.9 million dollars to 18 Oregon counties, covering about 2.4 million acres. That specific figure is a fiscal-2020 payment from a 2021 announcement, so it is a historical example rather than a current number; a more recent Interior release put western-Oregon O&C payments at about 28.4 million dollars.

Why it looks like a loss

Line either program up against ordinary efficiency and the seams show. Start with PILT's formula. The population ceiling caps credited population at 50,000 and pays a higher per-person rate to the smallest counties, which means the size of a county's check is tied to a statutory formula, acres times a CPI-adjusted rate, ceilinged by population, minus prior-year payments, and not to any appraisal of what the land would actually yield if it were taxable. A PILT payment is a calculation, not a valuation of forgone tax.

Then there is the coupling itself, which cuts both ways. Because Alternative A subtracts prior-year SRS and timber payments, a lapse in SRS mechanically inflates PILT, as it did to a record 733 million dollars in 2026. Viewed skeptically, that means the federal government partly pays twice for the same forgone revenue: when it fails to fund SRS, PILT quietly rises to absorb part of the difference, shifting the cost between accounts rather than reflecting any change in what the counties actually lost.

SRS's defining flaw is governance by cliff. A program born as a 2001-to-2006 stopgap has been reauthorized in a long string of short bursts, in 2007 and 2008, 2012, 2013, 2015, 2018, again through the infrastructure law in 2021 covering payments through 2023, then a lapse, then Public Law 119-58 late in 2025 covering the missed years retroactively. Every lapse forces counties to budget under uncertainty and sometimes to wait a year or two for a retroactive lump sum, as the FY2024 counties did until February 2026. A program meant to provide stability instead injects volatility. And when it does lapse, the 1908 fallback can be dramatically smaller. A forecast from the Oregon Association of County Engineers and Surveyors estimated that for one fiscal year, total SRS across all titles would run about 55.5 million dollars against roughly 8.3 million under the 25-percent fallback, a six-to-sevenfold drop. That is a single-source state-association estimate, and Oregon's O&C counties are outliers with unusually high SRS shares, so it is an illustration of what a lapse can mean on the ground, not a national ratio. But it captures the stakes: the safety net beneath the program is a small fraction of the program.

Underneath all of it is the same critique both programs draw: neither payment is indexed to a county's actual tax base or its actual service costs. The numbers come out of formulas and appropriations negotiations, which is why critics argue they are matched to politics rather than to the fiscal gap they claim to fill.

Ratio-adjusted for the counties

Now change the measure, and the case turns. The structural fact does not go away: a county genuinely cannot tax federal land, and it genuinely must serve it. It has to maintain roads that run across national forest, educate the children of families who live and work near it, and provide law enforcement, wildfire response, search-and-rescue, and emergency medical care on and around it. In a county that is majority federal land, the untaxable acreage is often the largest single presence in the jurisdiction, contributing to none of the local revenue that would ordinarily follow from land that size.

Seen that way, PILT and SRS are not subsidies in the usual sense. A subsidy pays someone to do something the market would not otherwise support. These payments are closer to a substitute for a tax the county is legally barred from levying. PILT, since 1976, is Congress's acknowledgment that federal land imposes real local service costs even though it produces no local property tax. SRS, since 2000, is narrower and more pointed: it backfills timber counties whose historic share of federal logging receipts collapsed for national policy reasons those counties did not choose and could not control. The land in question frequently can never be developed or sold to build a tax base, so the revenue it would otherwise generate is not deferred but permanently foreclosed.

That is why county governments treat these programs as fairness and solvency questions rather than as discretionary grants, and it is why the instability of SRS lands so hard. A county that cannot tax its largest landholder, and that watches the one program compensating for it expire and revert to a fraction of its value, is not managing a lost convenience. It is managing a hole in its budget it has no lawful way to fill on its own.

The ledger reading

PILT and Secure Rural Schools are the kind of programs that are honestly described as loosely targeted and honestly described as necessary, because those are answers to two different questions. Measured against an appraisal of forgone tax, the formulas are untethered, the population ceiling is arbitrary, and the deduction that couples the two programs lets one quietly inflate when the other fails. Measured against the plain fact that a county cannot tax the federal government and cannot make it leave, the payments are close to unanswerable, because the thing they compensate for, a permanently untaxable tax base, has no local remedy at all.

What is worth watching is the asymmetry between the two. PILT is broad and now runs on autopilot as mandatory spending, which is why it quietly set a record in 2026 without a single new vote. SRS is narrow and runs on a timer, which is why it lapsed, paid two years late, and by the middle of 2026 was already staring at its next expiration at the end of the fiscal year. Same problem, two designs, and the design decides everything. One county program can hit a record and another can go dark in the same season, for the same reason, and which one you notice depends entirely on which ledger you happen to be reading.

Fact-check notes and sources

PILT enacted 1976 (Public Law 94-565, October 20, 1976), recodified by Public Law 97-258 in 1982, now at 31 U.S.C. 6901-6907; administered by Interior; covers BLM, Park Service, Fish and Wildlife, Reclamation, plus the Forest Service, Army Corps, and Utah Reclamation Mitigation and Conservation Commission: the Department of the Interior PILT overview, corroborated by the Congressional Research Service report R46260.
PILT FY2025 of about 644.8 million dollars (645,169,260 authorized, 644,769,260 in payments plus 400,000 for administration) to more than 1,900 jurisdictions in 49 states, DC, and territories, a record at the time, with more than 12.6 billion dollars paid cumulatively: the FY2025 National Summary. PILT FY2026 of about 733 million dollars announced June 23, 2026, with the increase attributed primarily to the one-year SRS lapse shrinking the PILT deduction: the Interior press release.
The PILT formula (greater of Alternative A or B, population ceiling), the FY2025 rates of 3.46 and 0.50 dollars per acre, the ceiling from 232.73 down to 93.09 dollars per person, the 3.30 percent inflation adjustment, and the Alternative A deduction of prior-year payments including SRS and 25-percent timber receipts under 31 U.S.C. 6903: the Congressional Research Service report R46260. These rates are recalculated for inflation every year and are FY2025-specific, not permanent. PILT's mandatory/discretionary history and the fact that FY2025 funding continued automatically under Public Law 119-4 rather than being affirmatively appropriated by it: the CRS report R48517.
SRS created by the Secure Rural Schools and Community Self-Determination Act of 2000 (Public Law 106-393, October 30, 2000), codified at 16 U.S.C. Chapter 90, administered by the Forest Service, replacing the Act of May 23, 1908 revenue-sharing; the three-title structure: the Forest Service SRS Act page and SRS program page. The 1908 Act fallback as an average of 25 percent of seven fiscal years of receipts, not a current-year payment: the statutory text at Title 16, Chapter 90.
SRS of about 230.6 million dollars for FY2025 to more than 700 counties, and about 182 million dollars in retroactive FY2024 payments distributed February 20, 2026: the Forest Service release on the retroactive payments, with the FY2025 total announced separately by the Forest Service. The FY2023 figure of roughly 255 million dollars across 41 states is consistent with prior-year Forest Service reporting but is presented here as approximate rather than independently re-verified. The Secure Rural Schools Reauthorization Act of 2025 (Public Law 119-58, signed December 18, 2025), covering FY2024 and FY2025 retroactively and reauthorizing through FY2026: the enacted public law. As of mid-2026 the program is authorized only through FY2026; it is not permanently reauthorized.
The BLM exception for western Oregon O&C lands, where Interior rather than the Forest Service distributes SRS payments, illustrated by a payment of about 26.9 million dollars to 18 Oregon counties: the BLM press release. That specific figure is a fiscal-2020 payment from a 2021 announcement and is used here as a historical example, not a current number; a more recent Interior release put the amount near 28.4 million dollars. The estimate that a lapse would cut Oregon SRS from about 55.5 million dollars to about 8.3 million under the 1908 fallback: the Oregon Association of County Engineers and Surveyors forecast, a single-source state-association estimate specific to Oregon's outlier O&C counties, used as an illustration of magnitude and not as a national ratio.

This post is informational and journalistic, describing two public programs and public records. It is not legal, financial, or policy advice. Figures are drawn from government reports and public law, with derived or projected calculations noted as such; where advocacy, single-source, or state-association figures are cited, they are labeled, and dated examples are marked as historical rather than current.

PILT and Secure Rural Schools: Paying Counties for Land They Cannot Tax