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Two percent. It’s a figure so small most wouldn’t look twice at it. However, when it indicates a $300 million drop in Weld County’s assessed value, it stands out.
That’s because property taxes paid on oil and gas production and equipment account for 59% of Weld County’s assessed value, enabling county government to provide many of the services residents depend on. Equally important is the revenue oil and gas provides municipalities, school and fire districts — just a few of the more than 450 taxing authorities in Weld County that draw revenue from the commodity.
So, it makes sense that the drop in assessed value — which fell from $15.7 billion in 2019 to $15.4 billion in 2020 — may trigger a “sky is falling” reaction. However, both county government and the entities mentioned above plan for such decreases and will adjust future budgets differently because they are each impacted differently.
“Because Weld County is so much larger than other entities, it’s able to better weather the storm. It has more property [to generate assessed value] so, therefore, it’s able to handle changes better,” said Brenda Dones, Weld County Assessor. “It has greater diversity.”
Outside of oil and gas production, Weld County’s assessed value is also determined by many other sectors, which outperformed their 2019 totals. Weld County’s agricultural industry, one of the nation’s 10 best, grew 2.17%, and the county’s residential, commercial and industrial sectors grew by more than 36% combined — numbers that further strengthen the local economy. When coupled with board actions, residents benefit from living and working in Weld County.
“By consistently not charging our residents any county sales tax, growing businesses in unincorporated Weld County through programs like the Small Business Incentive Program and keeping our mill levy low, our residents have been able to keep more of their money, which causes many areas of our county to grow and succeed,” Weld County Commissioner Chair Mike Freeman said. "By controlling what we can, certain aspects of our assessed value were very encouraging.”
While Weld County Government has many other sources that generate assessed value, the county’s municipalities, school and fire districts may not have those same resources, making the decreased oil and gas production in 2019 a much greater concern. According to the Assessor’s Office, 21 municipalities, nine school districts and 13 fire districts in Weld County all saw decreases in revenue. Municipalities saw an average loss of 34% in oil and gas values, school districts saw an average loss of 29%, and fire districts lost an average of 36%, which will impact their future budgets.
“That’s why we saw some communities have larger percentage changes in their assessed value,” Dones explained, mentioning how the amount of potential property tax revenue varies in different parts of the county depending on the amount of residential, commercial or industrial property within their boundary. “They’re more dependent on that property tax because they don’t have everything else to be included in the mix.”
The importance of budgeting
While oil and gas production has been relatively strong for a number of years, it’s not as though this is the first time production has impacted Weld County Government or the bottom line of municipalities, school and fire districts in the county.
Don Warden, Weld County’s Director of Finance and Administration, has been with the county since 1978 and has guided the Board of Commissioners through four or five dips in oil production. He believes the county is and will remain financially strong due to the boards' resistance in growing government in times when oil and gas production has increased the county’s assessed value.
“When times are good, you can’t go out and spend wildly because it will come to an end eventually,” Warden said, mentioning how the county has focused spending on one-time projects and building a contingency fund, which will help the county deal with the drop in oil and gas revenue projected over the next few years. “We need it to cushion these booms and busts that will come, so we don’t have to cut county services.”
Just as county government must prepare for changes in oil and gas revenue, so too must municipalities, school and fire districts. Although they’re more vulnerable to decreases in production, Dones said many are prepared and that preparation is key in minimizing the impact of decreased oil and gas revenue.
“No local government has control over what assessed value is going to be,” Dones said. “Most of them have done a good job planning for this. Most of them are saying that oil and gas revenue is put into a special fund that won’t be responsible for funding annual maintenance or day-to-day operations budgets. It instead goes into a Capital Improvement budget — similar to what Weld County Government does with its excess revenue.”
By Baker Geist, Weld County Communications Specialist
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