Declining revenue forces county to plan for sharp budget cuts in 2010

Mesa County budget forecasters are predicting gloom, though not doom, for 2010 and beyond. As revenue continues to decline, more budget cuts are being made and planned.

“2009 is not the year I am worried about,” County Administrator Jon Peacock told the county commissioners Tuesday. “I am worried about 2010. That is going to be a tough year.”

Tough, Peacock says, because he sees revenue from severance, property and sales taxes plummeting. 

The county has made two rounds of budget cuts to adapt to a revenue shortfall, trimming about $5 million from its original 2009 budget to $155 million.

The county reduced merit-pay raises at the start of the year and saved an estimated $681,000. The county now has eliminated all pay increases, Peacock said.

County budget planners estimate that eliminating raises will save Mesa County $1.2 million for the year.

Officials are continuing to look for further cuts. “Nothing is off the table,” Peacock said. “Right now we are not looking at furloughs.”

Sales tax revenue has fallen considerably. County officials predicted 2 percent growth rate in sales tax revenue but are seeing a 16 percent decrease instead, Peacock said.

Sales- and use-tax revenue was projected to be about $4.4 million this year.  “We are projecting it could go below $1 million,” Peacock said.

Rebounding to current revenue levels will take years, he said.

“We don’t recover, even at 2015, to 2008 levels, and that’s a big hit,” Peacock said.

Property tax revenue is predicted to fall 7 percent in 2010 and continue declining through 2012. Peacock said property tax revenue will not recover until 2014.

Severance tax revenue is forecast to take a 70 percent dive for 2010, he said.

Severance tax revenue is disbursed to cities and counties based on the number of energy workers who reside in a given municipality. The recent slowdown in the industry and subsequent layoffs will have their greatest impact in 2010, Peacock said.

While cautioning that he is no fortune teller, Peacock said his forecast could change dramatically, depending on how the economy recovers.

“So, overall 2009 is a painful year,” Peacock said. “2010 is going to be a more painful year.”

If his forecast holds, the county will have to make additional budget adjustments. Those cuts could diminish the services Mesa County is able to provide residents.

“We are to service-level reductions at this point,” Peacock said.


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