On Feb. 27, the Board of County Commissioners gave the State of the County address to the La Plata County community. The speech is excerpted below:
La Plata County expects to collect $15,432,000 in property tax in 2017. In 2016, we collected nearly $19 million. That drop has a significant impact on La Plata County’s ability to serve its citizens, and it is what we are spending much of our time thinking about for this year and 2018.
We also learned in January that the residential assessment rate – that’s the percentage of a property’s value used to calculate the property tax obligation — will go down this year. In 2016, property tax was assessed on 7.96 percent of a property’s value. In 2017, it will go down to 6.56 percent.
This ratio is set by the state of Colorado and results from a 1982 ballot initiative called the Gallagher Amendment. That means in 2018, La Plata County’s total residential property tax receipts are expected to drop another $1.2 million below what we receive in 2017.
We also anticipate that oil and gas activity will not rebound enough this year to improve La Plata County’s revenue picture for 2018. We expect our property tax receipts to drop $1.4 million below this year’s levels – which fell $3.4 million from 2016.
This is a double blow for us because the state levies a severance tax on oil and gas production and distributes that money back to the counties where the minerals originate. Between 2015 and this year, our severance tax distribution from the state has fallen 69 percent.
The sum total of these factors is that we expect to be $7.1 million below 2016 revenue levels in 2018. The good news is that we know this now and are already preparing for the leaner times ahead.
Responding to this revenue plunge is not a simple task. We are looking at the challenge from three directions, beginning with internal cost savings achieved through Innovate La Plata successes. If we achieve our goal of saving 1 million in dollars and staff time, that will go quite a distance in closing the $3.7 million additional gap we expect between this year and next.
Beyond that innovation focus, we are looking at options for raising revenue as well as ways to cut La Plata County’s expenses. We take these conversations very seriously.
Twice in the past two years, La Plata County voters told us that they did not want to see their property taxes increase in order to pay for road improvements. We heard that message but now must consider alternatives.
We are having initial community conversations about a possible excise tax on marijuana grown in La Plata County. We are discussing a use tax on vehicles purchased outside the county but registered here. We are discussing impact fees on new development so that the growth we see in the future does not unduly burden today’s residents. We are examining our fees structures for the services we provide.
On the cost-reduction side, we are combing through La Plata County operations looking for ways to reduce our expenses. While we can trim small amounts here and there, major savings can come from only two places: service-level reductions and employee-related spending.
La Plata County cannot provide the services that we are obligated to deliver – and those things that our residents have asked us to provide – without our excellent staff. Personnel makes up nearly 42 percent of our total budget, and that translates directly into what we deliver to our residents.
So as we look to ways of responding to our fiscal challenges, we must look to balance the level of service we provide against the resources La Plata County has available.
These will not be easy conversations, nor will the decisions that follow them. But we believe that transparency and dialogue are never more important than during challenging circumstances. We absolutely want to hear from the community as these conversations develop and promise to share our thinking with you.
As we look ahead through 2017 and beyond, the Board of County Commissioners wants to craft policies that will bolster La Plata County’s ability to weather these financial storms.
Oil and gas activities are always cyclical, and we need to have a diverse county economy so that we do not struggle when the cycle swings low.
The La Plata County Board of County Commissioners is Julie Westendorff, chairwoman, Gwen Lachelt, vice chairwoman and Brad Blake, commissioner. Reach them at 382-6219.
