Garfield County manager says hold on to the severance tax money |

Garfield County manager says hold on to the severance tax money

John Colson
Post Independent Staff
Glenwood Springs, CO Colorado

The combined severance tax and mineral lease fee revenues coming to Garfield County will be the biggest check the county has ever received from the Colorado Department of Local Affairs.

And there’s a good chance the money, more than $11 million, will end up going straight into the county’s budget reserves to provide a cushion against expected hard economic times ahead.

“We were expecting it would be 2 million, maybe 3 million,” said an obviously pleased Ed Green, county manager.

Green said he had been told by at least one staff member that, thanks to a new method of calculating the distribution of severance and lease fees, “it might be closer to $5 or $6 million, but we had no clue that it would be more than $11.6 million.”

The money comes from payments to the state from energy companies to compensate for economic and social impacts felt in communities near where the energy companies are doing most of their work, and Garfield County is at the heart of one of the most heavily affected regions in Colorado.

Taken as a lump sum, including the money to be paid to towns and school districts within Garfield County, this region is to receive nearly $20 million, or approximately a quarter of the total amount disbursed by the Department of Local Affairs.

Green said the use of the money by Garfield County will be up to the county commissioners, who have not met since the state announced the disbursement on Sept. 2.

But, Green continued, he plans to recommend that the money be saved rather than spent.

“It’s pretty early,” Green said, referring to the process of incorporating the impact revenues into the county’s ongoing budget process.

But, he noted, he told the commissioners several weeks ago that, according to projections, the county’s current reserve fund of some $74 million is likely to be “negative $22 million over the next four years.”

He explained that, given the depth of the current recession and the slowdown of everything from the construction industry to the energy industry, revenues are expected to plummet in the coming few years.

Meanwhile, the county must continue to provide needed services to its residents, although it is anticipated that the various departments will be trimming their expenses wherever possible.

Given those budgetary expectations, Green said, “an extra 11 million will certainly help” keep the county from going into the red in the near future.

Green also admitted that his budget projections tend to be on the conservative side.

“Usually we underestimate our revenues and overestimate our expenses,” he said, which may leave the county in better shape than his projections might indicate.

And, if the county socks away as much of the $11 million as possible, “I think we’ll weather the next four years very nicely. Anyway, that would be my recommendation.”

The county currently is in the midst of figuring out its budget for 2010, and early indications have been that there will be little in the way of increases over the 2009 budget.

The overall 2009 budget was set at $126 million in revenues, according to online budget documents. The figures included, among other things, a $25 million “contribution” from the Chevron oil company to rebuild County Road 204, which is heavily used by Chevron’s vehicles and heavy equipment, as well as plans for several significant building projects.

The county’s revenues had been steadily growing for several years, from $85 million in 2007, with $31.7 million in the general fund, to $95 million ($35 million general fund) in 2008, according to documents available on the county’s website.

The county is expecting a 30 percent drop in sales tax revenues for 2010, compared to 2009, but because sales taxes account for only about 7.5 percent of the county’s overall general fund budget, officials say the impact of the shortfall will be relatively minimal.

Property tax revenues are expected to increase for 2010, compared to 2009, but then to drop off sharply in 2011 due to drastic decreases in property values as a result of the recession.

The reason the tax picture will not be affected until 2011 is because of a two-year lag-time built into Colorado’s tax structure. The fact that residential and commercial property values have been cut by the recession will not be felt in tax collections for another year and a half.

Support Local Journalism

Support Local Journalism

Readers around Glenwood Springs and Garfield County make the Post Independent’s work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.

Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.

Each donation will be used exclusively for the development and creation of increased news coverage.

For tax deductible donations, click here.

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User


See more