Property tax reductions proposed by county staff

“No one at the county can think of it ever being done”

For the first time in as long as anyone can remember, Gunnison County is proposing a reduction in property tax collections. Instead of taking the allowed property tax revenue increase of 5.5 percent, the staff-proposed county budget would decrease property tax collections for all components of the county mill levy by 7.37 percent.

“No one at the county can think of it ever being done, and Linda Nienhueser, the finance director, has been here nearly 30 years and she can’t even think of it being done,” county manager Matthew Birnie said.
The decrease will result in an overall reduction of $622,889 from 2010 property tax collections, to be reflected in all areas of the county budget, including $57,231 from the library district and $498,738 from the general fund.
But what taxpayers won’t see? A reduction in county-funded services. Birnie credits better budget management and increased oil and gas revenues for making the reduction possible without cutting services.
“We have an increased ability to analyze the relationship of funding to services through our new budgeting-for-results process that breaks the budget down by activity. It’s much clearer to folks, even inside the organization, how much an activity costs and what its benefits are. We didn’t eliminate any activities but found more synergies and ways to economize.”
Careful budgeting also led to a surplus at the end of 2010 from money that was budgeted but not spent. That gave the county more reserves to start out with in 2011, and Birnie expects a similar bump at the end of 2011. Combined with increased revenues from oil and gas, the county was in a good place to reduce property tax collections, even though those oil and gas revenues can fluctuate from year to year.
“Oil and gas revenues are very volatile,” Birnie said. In any given year revenues can fluctuate from over $1 million to less than half that amount.
“It’s based on the value of a commodity, so even if production stays the same or increases, you might get less revenue, but we think that over the next couple of decades there will be ongoing revenue,” Birnie continued.
As a result of the decrease in property tax collections, Gunnison County tax payers could see a decrease in their 2012 county property taxes by as much as 8.8 percent. But Birnie cautions that there is no way to predict the exact bill for any individual taxpayer; it will ultimately be determined by the specific property value and the mill levies of all the taxing districts.
“The whole bill comes from the county, but most of those taxes aren’t ours. This is the county portion of the bill. Nothing we do affects the school district’s piece, or the town of Crested Butte’s piece, or Mt. Crested Butte’s piece… or any of the other taxing districts,” Birnie said.
Finance director Nienhueser confirmed that last year the county portion made up 23.11 percent of the average property tax bill. The exact amount varied for each taxing location.
In addition to the proposed decrease in county property tax collections, the proposed budget also provides for a 2 percent cost of living adjustment for county employees. Without the adjustment, 2012 would have been the third year that almost one third of full-time employees did not receive a raise. Yet the cost of living has increased approximately 7 percent and health insurance premiums will have increased 21 percent over the same time period.
The Board of County Commissioners will consider the full staff-proposed budget through a series of work sessions during October and November, and they will hold with a public hearing on December 6.