La Plata County is preparing for a lean 2016, even though budget projections are still vague.
An expected drop in revenues from oil and gas taxes will not affect the county’s budget until 2017, but county staff members are looking for ways to reduce the rising costs of health care for employees and other expenses next year, said County Manager Joe Kerby during a meeting Monday.
The county has been faced with falling budgets for several years, and while property taxes have increased slightly in recent years, the road and bridge fund is still in trouble.
Tax revenue from gas and oil fell from $17 million in 2010 to a low of a little more than $5 million in 2014.
County staff members were hopeful 2015 would mark the start of a lasting financial recovery, but that will not be the case, said Diane Sorensen, La Plata County finance director.
This year, property-tax revenue is expected increase by $1.35 million, and additional increases are expected in 2016. But there are other sources of revenue that the county is unable to project.
The state Legislature cut the funds that will be returned to counties with gas and oil production in 2016 by $20 million, and it is unknown how deeply that could hurt La Plata County’s finances, she said.
In addition, less money will be available in energy-impact grants, which have helped supplement local road and bridge projects for years.
Congress also delayed funding payments in lieu of taxes for 2016, and it has the option of not fully funding this payment, so the county cannot project how that will impact the budget, Sorensen said. The county receives this money based on the number of federal lands in the county, and in 2015, this payment, which reimburses locales for property-tax revenue lost because federal land isn’t taxed, was $538,955.
To counter some uncertainty, the county is continuing work on stemming the tide of rising operational costs, including health benefits.
In 2015, the county budgeted $4.7 million to cover employees’ medical benefits. To help tackle the problem, the county has introduced a high-deductible health plan and a health-care advocate.
“It’s really beginning to put information in the hands of our employees,” Kerby said.
The county is also exploring the idea of a clinic for county employees to help save money.
The county also may reduce the amount it planned to spend on buildings during the next 10 years by purchasing two buildings in the Durango Tech Center. The county expected to spend about $53 million on buildings, and now the Long-Term Finance Committee projects the county will spend $44 million instead.
Despite uncertainty about the 2016 budget, the Road & Bridge Department is expected to be underfunded.
The county has used excess gas and oil revenue to help pay for road and bridge costs for years. However, the county may ask voters to approve a property-tax increase to help stabilize the department.
“Our road and bridge fund is actually on life support,” Kerby said.
The county polled residents in May on a mill-levy increase, and found support for a tax increase to support the funding of roads and bridges.
A steering committee of residents is currently debating the increase, and it will make a recommendation to La Plata County commissioners in August on whether to put a question on the November ballot.
mshinn@durangoherald.com
