PILT changes would raise property taxes in Lake County

by Nancy McReady
When the Lake County commissioners make their periodic trips to Fall Lake, there’s often a variety of topics. This past week was no different.
Fall Lake supervisors and residents were informed there will be a change in how state payment in lieu of taxes (PILT) distributions will be received and distributed.
Lake County and Fall Lake receive PILT to assist with the large amount of public land in the county. The amount is determined by the Department of Natural Resources.
The DNR has recommended the most fair and equitable way to distribute the payment would be the same as the way the payment is calculated.
This includes a per acre and a value-based amount.
Kerry Davis asked, “Will we be happy or sad about this change?”
The answer was, sad.
Seeing that budgets have already been set for 2020, this change will not be implemented until 2021.
Fall Lake will see a decrease of State PILT of about $1,930 per year for 2021-2024.
The county, however, will be hit much harder.
PILT payments fluctuate from year to year based upon the number of acres contained within the township, the per acre rate of payment stipulated by the state statute and the appraised value assigned to acquired natural resource lands.
An estimate of future state PILT payments to Fall Lake Township would be as follows:
2019 - $14,276;
2020 - $14,276;
2021 - $12,346;
2022 - $10,415;
2023 - $8,485;
2024 - $6,555
The new appraisal, which
is required by law according to the Thye-Blatnik Act every 10 years, shows a 53% reduction which will mean $1.33 million less in Federal PILT payments to Lake County.
This would require a 12.66% increase in the local property tax levy.
As if this news wasn’t bad enough, commissioners were informed last Thursday that the Forest Service conducted a reappraisal of Boundary Waters lands.
This was completed in December of 2018, but county commissioners in Lake, Cook and St. Louis Counties are just hearing about it now.
Both Senators Amy Klobuchar and Tina Smith, and Rep. Pete Stauber are aware of this change. The new appraisal will mean a huge downturn in value that impacts county levies.
The feeling was the Boundary Waters is no longer priceless with this big of a price devaluation. Sve said it’s invaluable.
This past Monday, Deputy Secretary of Agriculture Stephen Censky was in Minnesota for meetings with Stauber.
Commissioner Rich Sve and County Administrator Matt Huddleston, along with representatives for Cook and St. Louis Counties, were able to meet with him and with Stauber’s chief of staff Desiree Koetzle in Cloquet to discuss the huge reduction in the value of federal lands in the Boundary Waters.
It was related to Censky this will impact county budgets for the next 10 years. The counties will make further comments to Censky by August 1.
There were many comments from Fall Lake residents about the Boundary Waters appraisal.
Jim Weinzierl said, “If the BWCA land has gone down in value then our land value will do down as well. Will our taxes go down too?”
“If the value goes down due to the possibility of mining damaging the BWCA, which could happen,” said John Schiefelbein. “But the value of the Boundary Waters goes down without the mining.”
“Looking back at the 1960s,” said Davis. “When we had resorts and what the land value would be if the resorts had developed and there was no Boundary Waters, the value of the land could very well be 500 times more than what the Forest Service is saying now.”
Sve said Lake, Cook and St. Louis Counties are looking to retain an expert to address this appraisal with their assessors.
The commissioners weren’t sure how the reductions of both state and federal PILT will impact their budget, or impact property taxes.