Money will make up for expected loss of sales tax revenue
To offset bringing in less money from traditional sources, the county’s 2009 budget is getting a boost from Big Brother. Two federal programs could inject as much as $2 million into the county coffers this year.
During the Finance Department’s presentation of the 2009 staff proposed draft budget to the Board of County Commissioners on Wednesday, October 15, finance director Linda Nienhueser told the board that between $175,000 and $200,000 will be added to the general fund from an Interior Department program that contributes federal funds for non-taxable federal land.
Since more than 70 percent of Gunnison County is federally owned, the Payment in Lieu of Taxes (PILT) program will hand over the funds for the 2009 budget year with an additional $198,629 as a “make-up” payment from last year.
According to Nienhueser, this is the first year since the program began in 1976 that the government has paid the full amount owed.
The payments are normally allocated each year for counties to use for capital improvements, emergency services such as police and fire as well as search and rescue operations that take place on the lands administered by the Forest Service, Bureau of Land Management, any Interior Department agency or the National Parks Service.
That additional money will cover almost half of the more than $1 million in capital improvement projects that the county is planning for next year. Projects such as the Slate River Bridge and improvements to Kebler Pass would have otherwise been almost entirely funded through sales tax revenue and grants received by the county.
In anticipation of a smaller revenue stream for the rest of this year and all of next, Nienhueser said the county would be calculating a 2 percent decrease in sales tax revenue for the rest of 2008 and a 5 percent decrease for 2009. Together, the two-year loss is estimated at $130,000.
The county is also anticipating a 10 percent decrease in the Local Marketing District Tax—previously known as Lodging Tax—that is assessed on overnight stays in the Gunnison Valley. That will be an estimated $968,000 in lost revenue for the county.
And just when the county needs it, a second federal program got full funding when the Emergency Economic Stabilization Act of 2008 was passed into law this month. Funds from Secure Rural Schools Act (SRS) will be distributed through the state’s Department of Local Affairs. Through SRS, Gunnison County is eligible to receive more than $1.5 million, the second highest amount to be received in the state, behind the $3 million in funds being offered to Saguache County.
County manager Matthew Birnie announced the infusion of funds at a special meeting of the Board of County Commissioners on Tuesday, October 28 and asked the commissioners for consent to begin the necessary paperwork for the state. The state has until November 14 to respond to the federal government as a condition of getting the funds.
But instead of going into the county’s general fund for 2009, there are three areas where the money can be used. Road and bridge projects will get 85 percent of the funds; 7 percent can be used for regional projects; and the remainder can be put toward covering the costs of community wildfire prevention planning and search and rescue operations on federal lands.
According to Birnie, the new formula is partly based on the income of county residents, so the poorest counties get a greater percentage. Another basis is the amount of federal land inside a county’s border, which is why Gunnison County received so much.
Before the formula was revised, the county’s share of SRS amounted to 25 percent of what the current formula will provide.
“They changed the formula as a political means of getting this passed in that rescue package,” said Birnie. “There is no real logic for this bill other than politics. The real reason for this bill was to offset the effects of timber production on infrastructure and we haven’t been a real timber producer. They did it for political reasons to get more support throughout the west.”
Birnie continued, “There might be some offset with the amount we were anticipating getting from PILT. But the net benefit is still huge, obviously. But the funding will decrease by 10 percent a year and I would not count on this being reauthorized.”
Both PILT and SRS funds will go toward paying for projects being planned by the Department of Public Works, which will free up money to pay for other items being paid for from the general fund, said commission chairman Hap Channell.
The 2009 draft budget lists more than $15.5 million in available resources for county departments and programs. Almost half of that total will go to road and bridge projects.
The budget also increased the amount in reserve for the construction of a new detention center by $500,000, which would bring the total in that fund to nearly $1.4 million by the end of the year.
A public hearing for the proposed budget will be conducted on December 9 at 7:30 p.m. in the Commissioners’ Meeting Room in the Courthouse.