Garfield County coffers face a big drop
September 29, 2010
GLENWOOD SPRINGS – Belts are about to be tightened throughout much of Garfield County, though no one is sure yet exactly how tight things will be.
But officials are sure of the main cause – the amount of money paid into government coffers by the local oil and gas industry will be drastically curtailed for at least the coming year, and possibly longer.
As county officials go through the early work of preparing a budget for 2011, they are facing the prospect of revenues that may drop by 30 percent or more compared to last year’s.
Most of that decline is due to the ongoing slump in the natural gas industry, which went from boom to bust in one year, primarily as a side-effect of the Great Recession of 2008.
“Most of the residential property is staying the same,” Assessor John Gorman said, referring to his expectation that for most Garfield County taxpayers the values of their homes have not dropped precipitously.
But in terms of the energy industry, he warned, “We’re going to be dropping back to the level of something like 2005, as a percentage of total assessed value,” Gorman said, referring to the industry’s property values versus those of the county overall.
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“So the cash flow, of anybody doing [property] valuations in the gas patch … tanks next year,” Gorman concluded.
“For Re-1 [the Roaring Fork School district, with schools in Glenwood Springs, Carbondale and Basalt], it’s not going to make much difference,” he said, because the district collects very little in energy industry tax revenues.
But for Garfield County, he continued, rather than the $70 million or so collected this year, the revenues will be closer to $50 million or so in 2011.
And the smaller taxing districts in the western part of the county, Gorman said, can expect “an enormous drop in revenues” from the gas industry.
According to documents available on the county website (www.garfield-county.com), tax revenue from oil and gas activities “reached its peak last year  of $3.06 billion.” That figure amounted to “nearly 75 percent of the [overall county] assessed valuation,” which was almost $5.2 billion that year, the website explains.
The higher property values brought in “additional revenue for schools, fire departments and other tax-supported entities,” states the web document.
But for this year, Gorman’s projection is that “oil and gas valuation … has decreased to $1.34 billion, which may devastate local taxing districts in 2011.”
That devastation is likely to continue into 2012, the website reports, when the biennial re-appraisal of all property in the county is expected to “reflect the considerable drop in valuation for residential and commercial properties that occurred in the local real estate market in 2009 and the first half of 2010.”
If that were not enough, the website continues, the county’s taxpayers can expect to be “left holding a big tab for previously approved bond-issue projects.”
While the gas industry was booming, the website explains, “the industry contributed the lion’s share of revenue for bond payments. Now that revenues have crashed, taxpayers will still need to make those bond payments, so their tax bills … will eventually increase to cover the loss in taxes from oil and gas.”
Gorman is urging citizens to get involved in the budget processes of those taxing districts that they pay into.
“I’m telling people, get involved now, because the boards of directors of the various taxing authorities are going to need to know how to spend all the money they don’t have.”