House Passes Bill Returning $48 Million to Montana’s Rural Counties

WASHINGTON — The U.S. House of Representatives passed legislation Tuesday reauthorizing the Secure Rural Schools program through fiscal year 2026 and providing backpay for two years of lapsed funding, delivering an estimated $48 million to 32 Montana counties that rely on the payments for schools, roads and public safety.

Congressman Troy Downing (MT-02) voted for the bipartisan measure, which extends a program that compensates counties with large tracts of tax-exempt federal forest land. The program expired at the end of fiscal year 2023, leaving Montana counties without $16 million annually for 2024 and 2025.^1

“Montana’s students and teachers lost out on millions in funding when Congress failed to reauthorize the Secure Rural Schools Program,” Downing said. “As a former educator, I understand that every penny counts when it comes to the classroom. I was proud to support this measure today that ensures rural communities in central and eastern Montana have the funds they need to provide the best education for our next generation.”

The reauthorization provides payments for fiscal years 2024 and 2025, plus extends the program through 2026. Northwest Montana counties—the heart of the state’s once-dominant timber industry—receive the largest payments. In 2023, Lincoln County received $4 million, Sanders County received $1.6 million and Flathead County received $1.2 million.^2

The Senate unanimously passed the bill in June. All four members of Montana’s congressional delegation—Downing, Rep. Ryan Zinke, Sen. Steve Daines and Sen. Tim Sheehy—supported the measure.

The Federal Land Tax Gap

The Secure Rural Schools program addresses a fundamental revenue problem for counties with significant federal land holdings. Because federal land is tax-exempt, counties cannot collect property taxes on it—even though they must still provide roads, schools, law enforcement and emergency services to residents and visitors using those lands.

Since 1908, federal law has required the U.S. Forest Service to share 25 percent of revenue generated on federal land with local governments for “public schools and public roads.” Counties receive a share of timber sales, grazing fees, and other revenue generated from the federal lands within their borders. For decades, timber sales from Montana’s national forests provided substantial revenue for rural counties. But as timber harvests declined in the 1990s due to federal land management changes, county revenues collapsed.

Congress created the Secure Rural Schools program in 2000 to stabilize payments to counties as timber revenue sharing declined. The program has been reauthorized repeatedly with bipartisan support, but funding gaps have created budget crises for rural counties each time authorization expires.

In fiscal year 2023, the program provided $281 million to more than 700 counties across 41 states.^3 Following the program’s expiration, those counties saw a 63 percent cut in funding—a $177 million loss nationally.

“These are not abstract policy debates; they are tangible consequences for local governments and the communities that steward untaxed federal lands,” according to a Dec. 3 letter to House leadership signed by 75 House members and 27 senators urging reauthorization.^3

The letter warned that failing to reauthorize Secure Rural Schools “also jeopardizes the critical Payments in Lieu of Taxes (PILT) program,” which provides federal assistance to local governments with large amounts of U.S. Department of Interior lands.

Montana’s Dependence on Federal Land Payments

Montana has extensive federal land holdings, making both PILT and Secure Rural Schools payments essential to county budgets. In 2025, Montana counties received $46.5 million in PILT payments—the largest state payment in the program’s history—to compensate for federal lands administered by the Interior Department.^4

Secure Rural Schools payments, administered through the Forest Service, provide an additional revenue stream for counties with national forest land. The payments are calculated based on federal land acreage, economic activity, timber harvest levels and other factors that vary by county.

Counties use the funds for schools, road and bridge maintenance, wildfire mitigation, search and rescue operations, and other public services. The two-year funding gap forced counties to make difficult budget decisions, with some delaying infrastructure projects and others reducing services.

Short-Term Extension Leaves Uncertainty

While the reauthorization provides immediate relief, it only extends the program through fiscal year 2026—meaning counties face potential funding disruptions again in less than two years unless Congress passes another extension.

The National Association of Counties called the passage “a major victory for counties” but noted the need for a longer-term solution.^5 County officials have advocated for multi-year reauthorizations to provide budgetary certainty.

Montana received $28 million in Secure Rural Schools payments in fiscal year 2008, but more recent payments have declined to $16 million as the program has been repeatedly reauthorized with various funding formulas.^6

The bill now heads to President Trump’s desk for signature.