Savoy, a Berkshire County town of fewer than 700 people, has 11,924 acres of land that cannot be taxed because it is state owned, including the Savoy Mountain State Forest. The city gets nearly $ 80,000 a year for state-owned land, less than if the land were on the lots.
Still, Plymouth, a coastal city south of Boston, is getting almost nine times that amount for roughly the same amount of state-owned land. Plymouth receives more than $ 698,033 for 11,881 acres, including the Myles Standish State Forest.
That stark contrast in reimbursements is due to severe underfunding of the state’s pilot program, according to a report released Thursday by the office of state auditor Suzanne Bump.
“If the state fully funded the state-owned land program, communities could still have formula issues or falling property values, but they wouldn’t do so on a solid pie with competition from the wealthier communities,” Bump said in an interview with MassLive.
The report estimates that the SOL pilot program has a deficit of $ 15.6 million. Legislators have allocated $ 30 million to the program in the 2020 budget (and proposed to allocate $ 31 million for fiscal 2021), but the report suggests that the state needs $ 45 million to run the program fully finance.
The state’s current formula disenfranchises communities whose property values have fallen or are stagnating, the report said. The auditor’s office points out changes in the funding formula under the Municipal Modernization Act of 2016 that place more emphasis on land values. While some Massachusetts communities saw higher reimbursements, at least 56 cities have had PILOT payments decreased in the past five years.
“Often it is these small rural towns that already have a small tax base. If you convert more land from business or property tax to state land, it will have a significant impact on the city trying to make ends meet, “said Senator Adam Hinds, a Pittsfield Democrat.
State land accounts for one-fifth of Mount Washington’s total real estate value. The city of Berkshire County has 8,409 acres of state-owned land, much of which comes from the Mount Washington State Forest, and is receiving a reimbursement of $ 239,492, according to the report.
The report highlights the impact of underfunding, a changing funding formula, and declining property values in rural communities in the west or center of the state compared to their wealthier counterparts in the east of the state.
Warwick, in Franklin County, is being reimbursed $ 98,401 for 11,757 acres of state-owned land, which is one-tenth of the city’s total real estate value. Meanwhile, Barnstable, reimbursed by Camp Edwards land, is receiving $ 600,691 for a total of 10,812 acres, six times the money for less land than Warwick.
According to Bump, the state should take into account that some communities that are home to state-owned land and, in some cases, heavily maintained, have no room for new developments that can be another source of business tax revenue.
“You have so little recourse. Their population is decreasing. Economic activity is falling, ”said Bump. “You have several possible solutions across the Commonwealth.”
Municipalities could receive higher payments if the state expanded which countries are eligible, the report said. This does not include Massachusetts State Police barracks, National Guard armories, state Military Department, courthouses, and prisons.
Some properties, such as state prisons and state military campsites, are still eligible for the SOL program, but authorities have retained control of the land and deregistered.
The state could make some improvements by expanding which agency properties to include in the program.
“It’s an incremental change that we should acknowledge and that I think is easier to capture and that lawmakers could well accept,” she said. “We’re not shooting at the moon here.”
Bump says the biggest problem is chronic underfunding, but lawmakers may not be interested in fully funding a line item in the middle of a pandemic-triggered recession.
The legislature has used up almost half of the state fund for “rainy days” in the context of the $ 46.2 billion state budget proposal for 2021. If lawmakers rely on the remaining funds for the next budget, there is a risk that the creditworthiness of the state will be negatively affected unless Congress reaches an agreement as a stimulus package that sends aid to states, the alternatives are broad Spending cuts and tax cuts.
When asked about the state’s budgetary concerns, Bump said lawmakers continue to fund discretionary programs but are not funding the SOL pilot program in accordance with legal requirements. While funding the program in full is not the only solution, Bump recommends increasing the funding for the program.
“This is indeed a legal obligation of the Commonwealth and I think that before funding some of the discretionary programs that abound in state government, consideration should be given to the statutory programs that speak for the viability of the communities over that Commonwealth, ”she said. “This is a matter of economic growth and the lack of it for some communities, which in turn has some implications for education and health care.”
- “There ain’t enough of us out here”: Falling state-owned land revenues are brewing tension in rural Massachusetts towns