An effort by area legislators to revamp the payment in lieu of taxes formula for state-owned land took a significant step forward last week with the creation of a new commission to study whether to change state law to make it more equitable for communities in western Massachusetts.
Gov. Maura Healey on Wednesday signed an executive order to create the Commission on Payments in Lieu of Taxes (PILOT) for state-owned land that will be charged with examining the funding formula.
Through this formula, the state gives communities tax reimbursements on state-owned land located within their borders. State Sen. Jo Comerford, D-Northampton, and state Rep. Natalie Blais, D-Deerfield, say the current law unfairly hurts rural counties and rewards those in urban and suburban areas.
“For too long, the state’s current state-owned land PILOT formula has shortchanged rural communities in western and central Massachusetts, despite the enormous contributions these communities make in stewarding the commonwealth’s forests, farms and watersheds,” Comerford said in a statement.
The PILOT program gives money to 297 towns and cities across Massachusetts for some or all of the lost revenue involved with overseeing land that they steward on behalf of the state. The payback is necessary to the budgets of the communities that host large portions of public land, since they don’t receive property taxes for their oversight.
Municipalities in western and central Massachusetts steward most of the state’s public land, but they receive lower payments than communities in eastern Massachusetts. Even though both areas have similar acreage, the state-owned properties in western Massachusetts generally have lower property values, leading to less reimbursement through the program.
“Our small towns often struggle with the responsibility of stewarding our natural resources because the funding they receive from the state through PILOT is inadequate,” state Sen. Paul Mark, D-Becket, said in a statement. “I am grateful to Gov. Healey for taking this step to ensure that real solutions are developed and implemented quickly to significantly help our rural communities.”
The new commission will be tasked with evaluating potential changes to the PILOT program to further recognize the disparity in reimbursement levels, with particular attention to geographic equity.
The state’s average reimbursement rate for fiscal year 2024 was $127 per acre. Hampshire and Franklin counties fell well below that average, receiving $61 per acre and $32 per acre, respectively. Comparatively, counties in eastern Massachusetts received higher average reimbursement rates. For example, Norfolk County received $408 per acre and Suffolk County received $5,504 per acre.
The commission will consist of more than 15 members filled by department heads or their designees, focusing on geographic equity, fiscal sustainability, operational feasibility, and alignment with the state’s land conservation, biodiversity and climate goals.
The commission’s creation comes after a push from Comerford and Blais, who sent a letter to Healey in April, expressing their desire for program reform. Specifically, they wanted to see the program consider the value that the land provides toward reaching the state’s climate goals, called an “ecosystem services value.”
“We have to increase carbon sequestration and storage if we are going to meet our 2050 roadmap, so who’s doing that work? Western Mass. communities are doing that work,” Comerford said in an interview. “We are holding down carbon sequestration and storage for the commonwealth and that’s worth something.”
In the letter, the legislators explain that the current formula is flawed, since it mainly compares state-owned land to other state-owned land without considering other factors. As a result, less money is given to municipalities with slowly increasing or stagnating property values. A municipality’s share of total payments only increases when its property value grows faster than the state average.
Historically, the value of state-owned land depended on each parcel’s potential for development, which placed higher value on easily accessible and unforested land, unlike the majority of state-owned land in western Massachusetts.
“While we have made tremendous progress in adequately funding the program, the establishment of this commission by the Healey-Driscoll administration is welcome to ensure that the communities who are stewarding our natural and working lands are appropriately compensated for their service to the commonwealth,” Blais said in a statement.
Comerford and Blais began their push for reform when they proposed bills H.3032 and S.1939, “An Act to Reform Payments in Lieu of Taxes for State-Owned Land,” which currently sit on Beacon Hill. The bills seek to redefine the value of land based on its productivity toward meeting the state’s climate goals.
“Every single day my team and I hound Boston to recognize the particular funding needs of our communities. I am grateful to my colleagues and legislators who have heard me,” Comerford said. “It is my job to work with great colleagues and the Legislature to ensure every single funding formula, grant program, source of funding is working for western Massachusetts.”
