Routt County’s revenue projections for 2021 are up — a lot
Estimates show revenues are up 28% as the county starts building the 2022 budget
Routt County has seen an influx of money coming out of the pandemic that officials have never seen before, setting up a budget process for 2022 as the county enters what commissioners have called an “era of change.”
“Just because we have been doing business a certain way for 20 or 30 years doesn’t mean that that is how we have to continue to do business on into the future,” said Commissioner Tim Corrigan. “We need to have an open mind about how we move forward.”
Based on revenue already received in 2021 and looking ahead through the rest of the year, the county is expecting to bring in about $4.5 million, or 28%, more than initially budgeted. This doesn’t include the $5 million the county is expecting to receive from the American Rescue Plan or increases to property tax revenues.
This money represents a large majority, about 86%, of the total Routt County budget. Almost each revenue source saw an increase, with some projected to come in significantly higher than expected. The only revenue that decreased is interest revenue, as interest rates are historically low right now.
“I have never seen increases like this before,” said Dan Strnad, Routt County’s budget director. “I would not have anticipated any of this — that we would have this at the end of a pandemic — but we are someplace where people want to be.”
The largest windfalls come from sales tax revenue that is 23% higher than expected, highway user taxes that increased by 20% and an increase of almost 300% in building use taxes, which are collected when new structures are built in the county, which is currently happening at a record pace.
This increase is a positive sign financially, but it may not be all good.
“I think what you are seeing is wealthier people move into the community, they can spend more money, and they are pushing out the less wealthy people that don’t spend as much money,” Corrigan said. “Even if you don’t have the population growth, you have a whole lot of money flowing into this town.”
The county’s property tax revenues are also expected to increase by about $1 million even with TABOR, a Colorado law that limits how much money governments can retain from taxes. That increase could be even more as more people move into the county through the year.
Strnad said the highest sales tax increase he has seen before was 14%, but this year’s increase, which amounts to a projected $1.6 million more than planned, comes in large part because of Wayfair taxes collected on online purchases in the county. This has somewhat stabilized sales tax collection, with traditional mud-season months like April beating projected revenues by 64%.
“It seems like we have more people that are living here now, and they are spending money,” Strnad said. “I guess what I don’t know is if they will continue to live here.”
Strnad questioned the sustainability of some of these boosted revenues. For example, auto use tax has seen an increase of almost $500,000 due to increased car sales. Fees paid when buying a new car are up significantly as well.
“How many cars can you buy?” Strnad asked. “(A 45% increase in motor vehicle fees) in a year; that is a lot of cars.”
The somewhat tricky aspect of this year’s budget process is that while many revenue sources are up, it is unclear if they will continue to increase in the coming years. That means making big expenditures that will carry over into future budgets could be risky if that revenue isn’t there in future years.
Monday marked the start of the budget process, which will continue through the summer and into the fall, with a final proposed budget presented in November. Commissioners will vote on a final budget in December.
“We are seeing an influx of cash,” said Commissioner Tim Redmond. “My concern is that we use this properly and leverage it and put this county in a good position for the future.”
The county already anticipates adding two full-time employees for next year, one public information officer and a grant administrator. There will also likely be higher-than-usual costs for staff pay increases, as the county is currently working through a pay equity study that may suggest larger-than-normal increases for certain staff who were previously underpaid.
Redmond said the pandemic has exposed some weaknesses within the county, and he sees this as an opportunity to reevaluate and see how things could be done better.
“I will be looking at this with fresh eyes, and hopefully, I will be able to spot some things,” Redmond said.
Commissioner Beth Melton said she believes the biggest challenge will be managing this money, and other one-time revenues, efficiently to make sustainable choices for the county.
Corrigan said he sees a lot of opportunity to fund the county’s new Health and Human Services building with this revenue, which the county has set aside money for over the next two years and plans to build without any financing.
“Things are never as bad as they seem, and they are also never as good as they seem,” Corrigan said. “(There are) some numbers that would lead you to believe it is party time, but it’s not.”
To reach Dylan Anderson, call 970-871-4247 or email danderson@SteamboatPilot.com.
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