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Declining gas revenue will pose inevitable choice for La Plata County

Back in the 1990s, then-County Commissioner Fred Klatt frequently pointed out that every new home built in La Plata County represented a net loss to county government. That is, the property tax it generated was less than the cost of the county services its occupants required.

That is still true. And with the continued decline in tax revenue from gas production, La Plata County voters will at some point have to decide whether to maintain the county’s status as having the fourth lowest tax rate in the state or pay for the government services we all value and demand.

This is not a question of public policy but arithmetic. As noted in the county’s 2015 Comprehensive Annual Financial Report, natural gas prices have fallen 61 percent in the 10 years that ended Dec. 31, and another 24 percent since then. Further drops are expected through next year.

It shows. A decade ago gas taxes accounted for more than 60 percent of total county property tax receipts. That figure is expected to be less than 30 percent by 2017, with comparable cuts to severance taxes and energy-impact grants.

Natural gas has been a big part of the local economy for quite some time, and it served us well. But the boom is over and, as a retired Chevron executive told county officials Tuesday, “It’s not coming back.”

Current and previous county commissioners have done a good job of managing gas tax revenue. By setting aside gas revenue that exceeded the year-2000 baseline, county officials have been able to continue needed capital projects without borrowing. At the end of 2015, that fund had a balance of $20.5 million.

But that will not last forever, and going forward, population growth will increasingly pressure county government to do more – or at least spend more to keep up. If approved, the small tax hike on the November ballot will help with road and bridge expenses, but it is not a long-term fix.

Eventually, La Plata County residents will need to decide what they want from county government – and what they are willing to pay for.



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