An informal five-year general fund projection was presented to the San Miguel Board of County Commissioners on Wednesday by County Administrator Lynn Black in preparation for a formal budget presentation later this month.
Since 2010, general fund revenues have declined each year and the next five years is projected to be no different. The total revenues garnered in 2010 came in at just over $10 million. In 2011, revenues dropped slightly, and in 2012 projected revenues dropped even more, down to just over $9 million.
To account for that downward trend, the county has continued to make budget cuts where possible, and a hiring freeze has cut about $400,000 from the county’s payroll.
“The county had 130 staff in 2009 and [now] there are ,” Black told the commissioners. “The hiring chill has been working to help reduce our expenditures.”
Looking forward to 2013 revenues, Black is expecting a 3 percent decline as property taxes are also projected to decrease once again as well. Since 2010, the county’s property tax collection has decreased from $6,244,804 to $5,292,156, as projected for 2013.
For 2014, Black is projecting a further decline in property tax revenues, which she expects to be around a 10 percent drop. From there, she projects the property tax revenues to hold somewhat steady until 2017.
It’s in 2017 when Black suggests the county will have to make some tough budget decisions in order to keep with the county’s policy of holding at least 50 percent operating costs in reserve.
“Unlike the headlines for the Town of Telluride, which is starting to pull back on recession planning, we are going into our lowest points, when everyone else is coming out,” Black said. “We will be looking at different strategies in 2017, when we will have to balance the revenues to maintain a 50 percent reserve.”
Because of constant and frustrating uncertainty with federal Payment In Lieu of Taxes funding, Black expected PILT to be a big question mark for the county in years to come as well. PILT revenues down the road will help determine if, and how much, the county must dip into its reserves each year. Since 2009, the county’s PILT has actually increased from $292,104 to $803,352, and with the dollar amount of property taxes declining, the county has increased its dependence on PILT as a revenue source. The 2013 general fund projection is at $803,352, or 9 percent of total revenues expected.
“The big question out there is PILT. You never know how much we are going to get,” she said. “It could swing $600,000 in our eyes. I haven’t seen where PILT has been appropriated [for next year], and we may not know until June 30 when we see the check.”
As for other revenue sources, Black said they aren’t dismal. Both oil-and-gas valuation and sales tax funding are holding steady, and funding from the Real Estate Transfer Assessment has been good up until now even though, as Black said, “It’s hard to live on big sales, but if you get one of those [large home sales], it helps quite a bit.”
In looking at the tough budget decisions that may come over the next five years, commissioners Joan May and Art Goodtimes both agreed it won’t be easy.
“We already did the easy stuff and it wasn’t that easy,” May said.
“We will have to have multiple contingencies,” Goodtimes said.
“There are things we need to ratchet down on and things that won’t get done,” Black said.