Without a property- or sales-tax increase, La Plata County’s financial outlook looks bleak.
After months of meetings, the county’s Long Term Finance Committee recommended a property-tax increase to the La Plata County commissioners Wednesday night.
This increase would help cover declining property-tax revenue caused by falling natural-gas and oil production and property values. Natural-gas production, and the property taxes collected on it, have declined rapidly since 2010, and production and tax revenue are not projected to increase to pre-recession levels.
However, the committee members recommended the commissioners prioritize county needs and develop a time line for completing them to lower any needed tax increase.
The committee has been evaluating three property-tax increases and three sales-tax increases that would raise $98 million in 10 years to meet capital, operational and road and bridge needs.
“We’ve come to the conclusion that $98 million is not feasible,” said Ken Fusco, a committee member.
The $98 million includes about $56 million in capital expenditures that the commissioners will be re-evaluating and prioritizing. In addition, the committee will be spreading out the spending projections over a longer period of time and lowering the projections for the amount of grant revenue that the county will be awarded, at the direction of the commissioners.
Even with these adjustments, some kind of tax increase is needed to maintain capital needs, operations and roads.
“I’m not easily persuaded on a tax, but I think you guys have brought me around,” said newly elected Commissioner Brad Blake.
The recommended tax increases would create additional cash flow for both the General Fund and bridge and road projects.
County commissioners plan to revise construction priorities – looking to economize as much as possible. The estimates for construction will drive the Long Term Finance Committee’s recommendation for a mill levy increase.
The committee also recommended using about 90 percent of the $26 million in capital reserves to help lower the needed tax increase. County leadership set aside the funds during the gas-production boom, and it is separate from the county’s emergency reserves, said Diane Sorensen, the finance director.
Two tax-increase proposals suggested not dipping into the capital fund reserves, but several committee members expressed skepticism about that approach.
“That will not fly,” Ron Corkish, the chairman of the committee, said of the options.
The committee did not back any of the sales-tax options because the area has high sales taxes but low property taxes compared with other Colorado counties. But when the county polls residents about taxes, they may float the idea of sales-tax increase, Commissioner Julie Westendorff said. The county poll also may ask about property-tax increases and the type of projects county residents would support.
The county would like polling results back by April, said Joe Kerby, the county manager.
A ballot question could go to voters as early as November, Westendorff said.
“I’d like to get this resolved by the end of the year,” she said.
mshinn@durangoherald.com
Finance committee seeks member
The county is looking for a county resident with experience in finance and some knowledge of government to fill a new position on the Long Term Finance Committee.
Interested residents can contact the La Plata County Commissioners’ Office at 382-6219 with any questions. Applications are due by Feb. 16.
An application and a description may be obtained online at www.co.laplata.co.us/departments_and_elected_officials/boards_commissions or from the La Plata County Information Center, 1060 East Second Avenue, Durango.
Herald Staff
