County adopts resolution to halt DNR PILT deductions
Bill Supported by Markkanen
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HOUGHTON -- The Houghton County Board of Commissioners voted Tuesday to endorse state legislative reforms that would stop the state from deducting mandatory state land management fees directly from local funding allocations.
Under Resolution No. 2026-31, the board formally supports House Bill 6105, a state measure sponsored by Representative Tom Kunse, (R-Grant Township). The proposed legislation would amend the Natural Resources and Environmental Protection Act to eliminate a provision that allows the state to prioritize lake level special assessments over standard municipal funding distributions.
State Payment in Lieu of Taxes (PILT) distributions are statutorily required payments intended to offset local property tax losses on nontaxable, state-owned public lands including tax-reverted properties, recreation areas, swamps and forests. Under standard Michigan law, these annual revenues are split evenly between county and township general funds to pay for local law enforcement, road maintenance and basic public infrastructure.
Currently, when the Department of Natural Resources (DNR) incurs mandatory special assessment fees for water maintenance or dam infrastructure on public lands within a local lake level district, the state withholds these PILT funds to settle the bill. Under the priority rules established by Public Act 1 of 2022, the state intercepts these local allocations, deducts the DNR's mandatory lake level assessment bills from the top of the ledger and distributes only the remaining balances to local treasuries.
According to the Michigan Association of Counties, the current state policy creates an unfair financial shift by utilizing flexible local public service dollars to fund state property obligations. The association stated the practice reduces the necessary capital available for county law enforcement and township infrastructure, shifting state land management costs onto local taxpayers. House Bill 6105 would permanently remove this payment priority, requiring the state to cover its proportional share of inland lake maintenance costs without reducing the statutory PILT distributions legally owed to county and township general funds.
The reform bill moves to the full House floor for a vote by the chamber after being reported out by the House Government Operations Committee. The Michigan Townships Association and the Michigan Association of Counties both support the measure to ensure local taxpayers stop subsidizing state land maintenance costs.
State Representative Greg Markkanen (R-Hancock) also supports House Bill 6105. Markkanen's district covers the western Upper Peninsula, where local communities rely heavily on stable state funding. The resolution passed by Houghton County matches similar policy measures enacted by county boards throughout Michigan to protect rural general funds from state budget reallocations