La Plata County’s budget will face serious budget shortfalls in the next ten years without a property or sales tax increase.
The budget has been largely supported by tax revenues from natural gas, but revenues have fallen significantly since 2010, and now the county is examining new solutions.
“We’ve heard for years the oil and gas industry will no longer support the fiscal responsibilities of the county, and now we’re coming into that realization,” said Ron Corkish the chairman of the county’s Long Term Finance Committee.
Without a tax increase or a reduction in services, the budget deficits would climb to about $11 million just to cover operations over the next ten years, according to county documents. This does not include the millions of dollars the county needs to cover road and bridge construction.
“We’re going to be losing our roads if something’s not done,” Corkish said. To date the county has been keeping up with road and bridge projects through grants. The county also plans to subsidized the department with $675,000 in 2015.
The Long Term Finance Committee has crafted six different options for the county to raise revenue through property taxes or sales taxes. The members did not examine ways to cut the budget, but they did assume that expenses would grow 25 percent below the rate of inflation.
Three of the options proposed property-tax increases. Currently, county property-tax increases are set at 8.5 mills, the fourth lowest in the state.
The committee proposed increasing property assessment rate from 8.5 mills to 14.76 mills. This would cover 100 percent of the county’s capital and operating needs.
Two other options suggest lower property-tax increases, but they would require the county to draw down savings set aside for construction projects by about 90 percent.
“It makes sense to utilize some of the capital reserves,” said County Manager Joe Kerby. He said it would be a mistake to exhaust them, but did not voice support for any of the options.
The county currently has about $26 million in savings for construction projects.
The highest sales-tax increase proposed is 1 percent, which would bring the total county sales tax to 3 percent. This would initially reduce savings, but they would be replenished.
Lower sales-tax increases would cut into the savings without replenishing it.
The commissioners have not voiced a strong preference among the options yet. All of the options anticipate some kind of tax increase going into effect in 2017 after a vote.