County, cities to figure budgets based on less federal energy revenue
Local cities and Mesa County will be feeling the pinch as they create budgets for 2014 as some federal energy dollars and taxes on energy production are coming in about 40 percent less than last year.
Counties and municipalities in Colorado that have workers in the energy industries and have energy production in their areas receive a portion of federal mineral lease dollars and severance tax dollars.
Overall the state collected less money to distribute this year, $22.3 million, compared to $26.7 million last year, according to the Department of Local Affairs, which distributes the money.
For the town of Palisade, the trickle down of those dollars is $48,700 this year. After the town received $81,652 last year, officials roughly budgeted they would receive $80,000 this year to their general fund. The nearly $33,000 drop might mean the loss of one employee or delaying a project, town administrator Rich Sales said.
“It does sting a little,” Sales said, “especially when our revenues are down.”
Already Palisade attempts to save money by not spraying weeds as much as it used to and by letting seasonal employees off earlier than usual, he said.
Palisade’s total budget last year was about $5.7 million, Sales said.
Fruita’s city councilors also recently received word of the shrinking funds. The city received $423,778 in 2012, but will get $240,929 for this year, a difference of $182,849.
For comparison, when the region was flush in energy production in 2008, Fruita received $1.5 million in 2008 in federal mineral lease and severance tax dollars.
Fruita traditionally uses those dollars for capital improvements, city manager Clint Kinney said.
Kinney said councilors want to focus on updating city streets, but it will be more difficult with limited funds.
“What we’re pretty good at is leveraging our dollars against grants,” he said.
The hard part, Kinney said, is that the city needs money to be able to leverage it against grants.
Councilors have a robust goal of wanting to improve Fruita’s streets, but that may have to be pared back, Kinney said.
The city of Grand Junction uses its mineral lease and severance tax dollars on street maintenance. It received an $800,000 hit from last year.
“We did anticipate most of this decrease in our original 2013 budget so it did not come as a surprise,” said Jodi Romero, chief financial operations director for Grand Junction.
Grand Junction received $1 million this year.
Mesa County is set to receive $1.2 million in severance taxes this year, but received $1.9 million in severance taxes last year. Another $1 million will go to the separate federal mineral lease district entity, money that the county does not get to spend.