La Plata County is contending with declining property tax revenue in a draft of the 2025 budget presented last week to the Board of County Commissioners.
The news that the county’s property tax revenue, the largest single funding source for county government, is likely to decrease by $17.7 million next year – an 11.5% drop from what was projected in the 2024 budget – may be a startling realization for homeowners who noticed a significant increase in their property value last year.
As a result, county staff have proposed a budget containing just $136 million in expenditures next year, which is nearly 25% less than the $181 million approved for this year.
“The 2025 Proposed Budget outlines an imbalance between the Board of County Commissioners’ goals and priorities and the resources available to achieve them,” the budget message penned by County Manager Chuck Stevens and Finance Director Adam Rogers states. “We are optimistic that we can achieve service levels consistent with the community’s expectations in 2025 but without a structural repair to the county’s revenue resources, that likely will not be the case in subsequent years.”
Although the median property valuation in La Plata County jumped about 20% in 2023, and some soared far higher, the state Legislature has twice in the last 12 months taken action to reduce the portion of a home’s value that is taxed and expand credits and revenue caps.
These actions are the primary driving force behind falling property tax revenue, Strategic Management Director Megan Graham said. Sales tax revenue is projected to increase 6%.
Although sales tax revenue is expected to grow, the additional $1.6 million will not cover the expected decrease in property taxes.
In addition to the overall decrease in spending, the draft budget contains noteworthy proposed changes in the size of the pie slice each sector receives.
General government services – those provided by most county elected officials – will retain the largest slice of the pie, albeit one that shrunk from 43% in 2024 to 34% in 2025, according to the draft.
The public safety category, which includes the Sheriff’s Office, the 6th Judicial District Attorney’s Office and the coroner, is projected to use 29% of county expenditures, a jump from 22% in this year’s budget. Staff propose that the health and welfare services’ share of the pie remain steady at 16%, the recreation and culture sector grow from 6% to 11% and the public works sector shrink from 13% to 10%.
County commissioners and staff will review the 112-page document in depth next week and are likely to tinker with the numbers before final approval. The board will hear input from the public at a hearing the evening of Oct. 8 and is tentatively set to approve the final draft on Dec. 15.
Given falling revenues, Graham said capital projects will be hit the hardest. The allocated funds next year are likely to drop from $65 million in 2024 to $30 million in 2025.
“In general, we’re going to see a dramatically constrained capital project list,” she said.
The budget contains funds for road and bridge maintenance, but no capital improvement funds. In recent years, the county has redirected $5 million sales tax revenue into the road and bridge fund before it enters the general fund to address a deficit in that department’s revenue. As predicted by Rogers last year, that will not be possible in 2025.
“Our overall revenue picture doesn't suggest that there's going to be sufficient revenue to make that diversion,” Graham said.
The BOCC will hear public comment on the proposed budget, which can be viewed online at bit.ly/4ewsiMe, at 5 p.m. Tuesday, Oct. 8, or in person at the County Administration Building in Durango.
rschafir@durangoherald.com
