Visitors and residents alike treasure the Pioneer Valley and the Berkshires for its expansive and undisturbed nature that offers peaceful hikes along forest trails, breathtaking views and the chance to observe wildlife in its natural habitat.

But despite all the recreational, public health and climate benefits state parks and forests can offer, the program that reimburses municipalities for hosting state-owned land offers far less than it does for developed land in high-demand markets.

This has led to wide disparities in the rates paid to different communities, impacting western and central Massachusetts, which are home to two-thirds of all state-owned land eligible for the Payment In Lieu Of Taxes (PILOT) program. While the median reimbursement rate per acre in the state is $127, the median rate in Hampshire County is $61, while its event lower, at $32 and $33, respectively, in Franklin and Berkshires counties.

This systemic inequity is the focus of a new report compiled by state Auditor Diana DiZoglio and the Division of Local Mandates, which DiZoglio presented to local officials and community members in Windsor on April 7. The report offers recommendations to narrow this disparity, including setting a funding floor — or a minimum amount a municipality can receive per acre.

“From farming to forestry to conservation and small business, western and central Mass communities carry a deep tradition of resilience, hard work and commitment to the land and generate real value economically, environmentally and culturally. It is time that the government’s resources and attention match the value that these lands provide,” DiZoglio said.

What is PILOT?

PILOT is a program that reimburses 297 towns and cities across the commonwealth for lost revenue they would otherwise collect on land that is state-owned, and thus, tax-exempt.

For communities that host large swaths of public land, these payments are essential for municipal budgets.

“Given that our cities and towns rely on property taxes to fund much of our local services and given that land is taken off the tax rolls when it is state-owned, the issue of how towns and cities are reimbursed has a direct impact on how services are delivered for local residents,” DiZoglio said.

The formula that determines the rate those communities are paid has long undervalued protected land, even as it accounts for 92% of all state-owned land eligible for the program.

Historically, the value of state-owned land depended on each parcel’s development potential, effectively placing higher value on easily accessible and unforested land.

In fiscal year 2024, the median reimbursement rate per acre for municipalities with over 50% developed state-owned land was $936. The rate for municipalities with over 50% protected state-owned land was $110.

Over the past decade, reforms have sought to standardize the valuation process and the state has increased the total funding available for PILOT, but inequities persist. That’s because the formula continues to tie state-owned land values to taxable property values in each municipality, leaving cities and towns where property values are low with correspondingly low PILOT rates, regardless of the value the state-owned land offers.

Plymouth-Savoy conundrum

Eighty of the 97 municipalities that receive reimbursements below the state median of $127 are located in western and central Massachusetts.

“With per acre reimbursements ranging from $5 to $120 with a median of only $42 [per acre], central and western Mass municipalities have some of the lowest per acre PILOT rates in the program, still, even after all these years of advocating,” DiZoglio said.

The Berkshires is home to the most acres of PILOT eligible state-owned land in the commonwealth, but its reimbursement rate by acre is $33, the second lowest in the state. Suffolk County is home to a fraction of that acreage, but receives a reimbursement rate of $5,504 per acre.

Even municipalities with similar PILOT acreage and land holdings can receive vastly different reimbursements. In Massachusetts municipal circles, this has come to be known as the Plymouth-Savoy conundrum.

This prototypical example compares two communities with similar state forest acreage, the coastal town of Plymouth and Berkshire County’s Savoy.

Despite having roughly equivalent land area, Plymouth’s reimbursement rate is nine times that of Savoy. In fiscal year 2024, Plymouth received $1,210,586; Savoy received $132,040.

Beyond ‘market value’

In the report and during her presentation in Windsor, DiZoglio stressed that the current formula used to determine reimbursement rates for state-owned land ignores the countless environmental, recreational and public health benefits that protected land has to offer.

“We need to think about our local parks similarly [to our national parks] with respect to the value that they provide to our local communities that is not necessarily related to the market value,” DiZoglio said.

State forests and parks provide recreational activities like hiking, cross country skiing and jogging that are linked to positive health outcomes like reduced levels of anxiety and depression and improved sleep and mood, DiZoglio said.

“State-owned land in this part of the state is providing a lot of ecosystem services and other benefits to everyone in the state, and yet we are getting a fraction of the payments that this land is producing in benefits to the rest of the state,” said Dicken Crane, board chair of the Woodlands Partnership and the owner of Holiday Brook Farm in Dalton.

DiZoglio and the Division of Local Mandates offer a few suggestions for how to narrow this disparity in their report.

Among them is a recommendation that the Legislature set a funding floor of $50, $75, $100 or $125. Municipalities that currently receive payments below that funding floor would receive supplemental funding calculated by subtracting the community’s PILOT rate per acre from the funding floor and multiplying that number by the municipality’s total acreage of protected land.

Even a funding floor of $50, the lowest number proposed, would positively impact one in four municipalities, most of them in western Massachusetts, the report said.

“This is very much a plan to move us one step further toward justice for our towns that have been left behind by state governments,” DiZoglio said. “These recommendations are a path toward real investment in our rural hill towns’ futures.”