When it comes to revenues, we commissioners take all the good news we can get. Late last month we got a little bit of good news.
As we head into the 2018 budget season, we have been anticipating a large drop in revenue largely because of declining oil and gas price and production. Earlier this year, the grim revenue picture was worsened by an adjustment to the residential property tax assessment ratio set by the state.
The Gallagher Amendment to the Colorado Constitution determines this ratio, and we had expected the adjustment to reduce La Plata County revenues by an additional $1 million in 2018. The good news is that the reduction is likely to be just $500,000 next year rather than $1 million.
In the context of a $7 million decline in revenue between 2016 and 2018, that means a lot. Now, we are looking at approximately $6.5 million in fewer dollars. It still leaves us with a pretty stark picture for next year and quite likely beyond. That means the board of county commissioners has many difficult decisions to make as we plan for 2018 and the years that follow.
We are approaching this challenge from three angles.
We are looking at operational cost reductions including leaving vacancies unfilled or delaying rehiring and voluntary early retirement for qualifying employees.
We are exploring options for new revenues including impact fees for new development, a marijuana excise tax on product cultivated in La Plata County and increasing fees for county services and facilities rental.
Finally, and most painfully, we are considering service-level reductions including reduced magnesium chloride, gravel and sand for county roads, reduced funding for public service agencies and suspending new guardrail installations, among other items.
We also have discussed eliminating funding for the branch libraries at Sunnyside and Fort Lewis Mesa elementary schools. We are actively seeking alternative sources of funding outside of the county budget so that these branches can remain open and have had a number of conversations with community partners about options. I encourage the many folks who use these libraries to be thinking about possible funding streams as well. We want to work with the community to find a solution.
Make no mistake, these are painful conversations and very difficult things to have to consider. Our job as commissioners is to ensure that we are doing everything we can within our means to protect the health, safety and welfare of our residents. That means investing where we must according to state law, and where we can according to our means. As revenue streams decrease, our discretionary spending must shrink too.
La Plata County’s operational revenues have been in decline for several years and we have trimmed accordingly. As we see those revenues continue to fall, with no sign of significant recovery, we now must look beyond trimming. We have to look for every dollar we can save and consider whether the county is in a position to offer the discretionary services we want to provide the community, and we know you value greatly. The libraries are on that list. Ass elected officials who are responsible to you as taxpayers, we have to look closely at those and other services to see what makes sense from a fiduciary perspective.
These are not the types of decisions we want to have to make. La Plata County sharply feels the compounding effects of a property tax rate that cannot support the services we have historically provided, the reduction in dollars from severance tax and grants from the state that oil and gas activity funds, and the reduced residential property tax revenue we will see in 2018. We have no choise but to look for every dollar we can save.
As we head into budget season, these conversations and the resulting decisions will become more concrete. In the meantime, we are considering a range of options for reducing expenses and for generating potential new revenue sources.
We want to hear your ideas as well. Commissioners Lachelt, Blake and I all welcome your thoughts and input as we wade through these challenging times. We are painfully aware that whatever solutions we choose, there will be consequences for residents and the community. There is no way around that, given La Plata County’s financial position.
We are committed to an open and honest dialogue about the situation and the tools available to respond. Please be in touch with us as we tackle the 2018 budget.
Julie Westendorff is chair of the La Plata County Board of County Commissioners. Reach her at firstname.lastname@example.org or (970) 382-6217.