County avoids projected budget decline
Though commissioners had feared another big drop in tax revenue on top of this year’s $17 million slump, revenue projections for the 2018 budget show only a slight reduction.
The county is looking at about a $667,000 decrease in property tax revenue for 2018. That would be about $29.6 million in total property tax revenue. Though it’s a relatively small drop from the previous year, that’s the lowest property tax revenue for the county in 10 years.
The 2016 budget included about $46 million in property tax revenue.
Garfield County commissioners and department heads met Wednesday to kick off the 2018 budget process.
Commissioner Tom Jankovsky said it was a relief for commissioners to learn they wouldn’t have to cut the budget by the $5-7 million that had been expected, though the budget process may still feel like a squeeze because of increases in personnel compensation and insurance.
The county expects an overall budget of about $105 million for 2018. In the 2017 budget, more than $54 million was appropriated for the general fund.
About half of the county’s tax revenue is tied to the oil and gas industry, said Theresa Wagenman, county finance director. That’s down from past years, when it made up about two-thirds of revenue, she said.
Wagenman noted that the county’s tax revenue tied to oil and gas lags by two years from production until the county actually receives that revenue.
So, 2018 revenue actually reflects oil and gas activity in 2016.
Both natural gas production and price have been declining. But the early months of this year have seen modest but encouraging increases in gas prices that Wagenman hopes mean a boost in the future, though production is slow to react to that change.
Though the valuation of oil and gas production is projected to drop by 7 percent, the county’s total assessed value will only drop by only 1.5 percent, translating into the $677,000 drop in property tax revenue.
Overall revenue is expected to remain relatively flat in 2018, with increases in other revenue areas largely covering decreases in property tax from oil and gas.
For example, residential property tax revenue is expected to increase by about $370,000, and revenue from severance tax is forecast to increase by 800,000 next year. Sales tax, though it is not a significant revenue source for the county, is expected to remain flat.
Wednesday’s meeting marked the start of the 2018 budget process, with eventual approval slated for November.
Next, the budget review team, made up of Jankovsky, Wagenman, Deputy County Manager Fred Jarman and County Manager Kevin Batchelder, will meet with department heads to review their budget proposals. After that the budget review team will draft a proposed budget and present it in the first week of October to the full board of commissioners.
Then commissioners will sit down with department heads to go through their budget proposals and receive public comments.
Commissioners have already laid out some goals for the 2018 budget: to have the county maintain its current operations and service levels and to keep a balanced operating budget. Department heads will be asked to find savings to absorb increases, and any increases they request will need “full and detailed justification,” according Batchelder.
The county is expecting to see increases for employee compensation and costs of insurance, though exact figures aren’t yet known. The county will also seek to maintain its current head count of employees, but departments will have to justify filling any vacancies.
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