Mesa County officials are welcoming a continued trend of an improving local economy while warning of negative economic indicators, particularly when it comes to the ongoing slowdown in oil and gas development in the region and the associated job and tax- revenue impacts.
“We keep saying that we are cautiously optimistic but we are watching out. There’s a lot of challenges,” Mesa County Administrator Pete Baier said in a state-of-the-county presentation Monday.
Baier provided a generally rosy picture of the state of the local economy judging by the numbers, a trend that has continued for several years now.
County sales tax revenues have shown steady growth since 2016, and topped $35 million last year, up from about $32.8 million in 2018. County building permits likewise have grown continually since 2016, although the pace of growth slowed a bit last year, with 4,733 permits issued, compared to 4,664 in 2018. And foreclosures in the county have fallen from 543 in 2016 to 211 last year; they totaled 261 in 2018.
Baier called the foreclosure trend a good sign, saying it indicated “that the economy is working for folks” and they’re getting jobs.
Indeed, the county’s unemployment rate in December was 3.1%, down from 4.9 percent a year earlier. Baier noted that many consider a 2.5 to 3% rate to indicate full employment.
Growing labor force
The county labor force has continued to grow in recent years, from 71,994 in December 2016 to 77,383 last December, although Baier noted that the rate of growth slowed a bit last year. In December 2018, it totaled 76,620.
In one departure from the general upward trend, applications to the county for food assistance in December totaled 849, up from 665 in December 2018 after declining since 2016.
“We do still have people out there that need some help,” Baier said.
County Commissioner Scott McInnis told Baier he thinks the county hasn’t yet felt the impact of the departure of oil and gas jobs. He said it’s not just the loss of the high-paying jobs themselves, but also the loss of things such as the medical insurance they received. He indicated the effects are being felt beyond the oil and gas sector itself.
“I heard from a dentist and I heard from a car dealer that they’re really starting to see the impact” of the oil and gas slowdown,” McInnis said.
Oil and gas drilling in the Piceance Basin has fallen to just a couple of rigs, thanks to low natural gas prices combined with uncertainty surrounding the impacts of ongoing rulemaking processes brought about by Senate Bill 181.
That measure was passed in Colorado last year to prioritize protection of the public, environment and wildlife in regulating oil and gas development.
In October, energy services company Halliburton notified the state that it was laying off 178 workers at its Grand Junction office. The company blamed the layoffs on local market conditions.
Baier said he thinks the slowed growth in the labor force reflects factors including the difficulties of the energy industry in working through the new oil and gas regulations.
Grants likely to be affected
For Mesa County, the energy sector’s problems also are expected to impact grants the county gets from the state Department of Local Affairs, based on oil and gas severance taxes.
“That will put a pinch on what we’re trying to do with many of our road projects,” Baier said.
He said recently funded county projects on Kimball Creek and Buzzard Creek roads in the Collbran area relied heavily on state funds derived from the oil and gas industry.
While more than 70% of the county is public lands, County Commissioner John Justman said, “Right now I’m not so worried about the feds as the state level as they decrease oil and gas production, if that’s what their goal is.”
He said he didn’t know of any plans for a severance tax on wind and solar, and also worried about electric cars not paying a lot for roads. Such cars don’t pay gasoline taxes.
“If we’re really going to phase out the fossil fuels, what’s their plan with that?” Justman asked, referring to state officials.
Baier said many bills in the state Legislature, addressing things from family medical leave to additional regulations on industries, could have impacts on the local business community, affecting the county’s sales tax revenues, or could impact the county directly.
Commissioner Rose Pugliese tracks state and federal legislative efforts that could affect the county. She said she is watching for things such as how proposals for a health-care public option could affect Mesa County, which self-insures health insurance for its employees.
She’s also advocating for changes to the rural Jump Start program, to make it easier for new and expanding business to make use of that economic development program.
The county is itself a local economic force, employing some 1,200 employees, operating more than 60 buildings that combined entail nearly a million square feet, maintaining some 1,500 miles of roads, and carrying out the many law- enforcement, motor-vehicle, human-service and numerous other functions that fall under its purview.
Baier said of county employees, “They really do care. They’re really trying to go out there and serve the community well.”
McInnis pointed to the Bureau of Land Management’s decision to locate its national headquarters in Grand Junction as another highlight of the past 12 months in Mesa County. He credited Pugliese and Justman for helping make that happen, along with Interior Secretary David Bernhardt, who grew up in Garfield County.
“We have a lot of reason to be optimistic in the county,” McInnis said, adding that things for the county are a lot different than they were several years ago.