Volume 106, Number 21 - May 22, 2009
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Last year for county windfall?
With diving natural gas prices, Sublette County will more than likely be on its last year of windfall assessment revenue, according to the state’s Department of Revenue estimates.
“We’re saying that it’s great now, but don’t be betting the farm that it’s going to last to the end of the year because it will be over with when the money comes in next year,” said Craig Grenvik, administrator of the mineral tax revenue division.
The consensus revenue estimating group (CREG) reported earlier this month that Sublette County would likely be lifting assessment taxes from $5.5 billion for the upcoming fiscal year — up from $3.7 billion last year.
However, each fiscal year receives funding from the prior year, so fiscal year 2009/2010 will still be benefiting from the prosperity of 2008.
“It’s really kind of a quirky timing issue, how the county gets its money,” Grenvik said. “There’s a time lag in there. Now, here in 2009, the price of natural gas has plummeted.”
If the $5.5 billion estimate from the CREG report holds true, and sales tax revenue hold steady — accounting for about $13 million last year — the county might build on last year’s $137 million budget.
Since the turn of 2000, Sublette County has been a major beneficiary of assessed value on the mineral production in the county. In 2001, that value taxed was $475 million. It rose to $1 billion in 2003. Although that number began to tail off some in 2005, this year’s numbers indicate a large rebound.
Now that the economy has turned, the Department of Revenue has been sending out the first warning shots — a warning that will really come down hard on Sublette County.
Estimates for next year’s assessed value numbers could halve that $5.5 billion, or even worse. Counties without coal production will be hit harder, Grenvik said.
“I haven’t looked at it by a county-by-county basis, but it will probably be much worse in Sublette County,” he added.
Just keeping overall production the same as last year — something both state and industry officials are skeptical of — but adjusting the taxable price, would drop that taxable value down to $1.8 billion.
“That’s kind of what we’re expecting,” County Clerk Mary Lankford said. “Taxes are assessed a year behind, and with the activity this year, I expect to see a sharp decline.”
The commission has set aside close to $50 million in reserves, which makes up a sizable chunk of last year’s $137 million.
For now, the commissioners are not ready to panic by any means.
“We’ve set money aside in reserve accounts over the last several years, and we have that money available for operating costs as well as capital facilities,” Chairman William Cramer said. “I think we might look a little closer at things like road and bridge — not turning that over as quickly. I don’t think we have to think too seriously about that at the present time.”
The commission still has a few capital projects on the horizon, but those are generally included in reserve accounts, including some money for a fairgrounds expansion, and some considerations for the former Big Piney/Marbleton Recreation Center land.
“There is some stuff we’re funding that we don’t have to,” Lankford said, noting the increased budget for human health services, recreation and the Class II Road program.
A scaled-back budget shouldn’t adversely affect county employees, either.
“In fact, the commissioners have said they haven’t made any decisions on raises, but there’s nothing out there telling us to cut people,” Lankford added.
For now, the state is just telling counties to brace themselves for changes — at least in the short term — and Sublette has taken note.
“We’ve been seeing a 10 percent drop from our peak [in 2005],” Lankford said. “We know next year is going to be terrible.”
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