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State values on oil facilities will have impact on budget

Posted 9/22/15 (Tue)

By Cecile Krimm
According to a state formula, Divide County is calling for a tax levy 17 percent higher than last year, but commissioners say the figure is misleading.
That’s because the state has yet to provide values on pipelines, gas plants and salt water disposal facilities. Those values, commissioners say, could have a significant impact on individual taxpayers.
Commissioners said this has been one of the most difficult years ever to come up with a budget.
“In the past we’ve been able to hold the line and oil revenue has helped us,” said Divide County Commission Chairman Doug Graupe. “Now, with the decrease, it makes it really difficult.”
Especially when the values given to multi-million dollar facilities have yet to be released from the state. Despite not having those figures, the county must approve a budget early next month.
“I’m hoping we have more information by the time we have our public hearing,” said Commissioner Gerald Brady.
That hearing is set for 7 p.m., Monday, Oct. 5, at the courthouse. Notice of the  hearing is contained elsewhere in this week’s edition, but commissioners elected this year to omit publication of the preliminary budget   since it is not required by law.
A copy of the proposed budget was sent last week to all property owners with values projected to increase by more than $3,000 or 10 percent. The budget is also available at the courthouse.
Taxpayers will want to know at the hearing how the increase will affect them, but at this point commissioners don’t know whether the burden is going to fall more on residential, commercial and agricultural property owners or on entities connected to gas and oil.
“I think that 17 percent is skewed a little bit,” said Commissioner Tim Selle, and may be more like 10 percent -- or less, if centrally assessed property comes in with a higher value than last year.
Nearly the entire increase of five mills can be attributed to a $200,000 increase in the Farm to Market road levy, Graupe said. The levy will help provide a match for federal funds already okayed for a grade raise on Co. Road 11.
Most of the rest of the changes, he said, are minimal, though a look at the change between this year’s General Fund allocation and last years at first appears significant.
The difference, said Graupe, is that the legislature last session agreed to move several formerly separate levies into the general fund. OASIS, County Fair, County Park, Country Recreational Facility, Insurance Reserve and Comp Health Care line items this year show a zero levy because those items are now part of the General Fund levy.
Consequently, the call for General Fund dollars increased from $276,000 to $568,000. But the true difference is only about $10,000, once the other funds are added in.
Graupe said the change will remove the need for frequent transfers from the general fund to make up shortfalls in any of those areas.
Also plugged in is a $1 million decrease in oil and gas production tax revenue.
The hope is that centrally assessed properties will bear much of the budget increase. The value of such properties is a key reason why the taxable value of all property in the county has more than doubled since 2011, from $13 million to over $34 million.
“Centrally assessed property has more impact than it has in the past,” said Brady. 
If the centrally assessed values come in higher than expected, it could reduce the burden on the rest of the taxpayers.
But if it comes in the same or lower, the other property classes will be impacted.
While Graupe believes some newly installed pipelines will add to the overall value, Brady worries depreciation on existing infrastructure could counter any growth.
The idea that a slowdown in the oil patch might help the county gain ground holds little weight with these commissioners.
“It is a breather, but the uncertainty now is scarier than the growth was before,” said Brady. 
Brady said he doesn’t want to pass a budget unless those centrally assessed figures are known.
“I just think it’s unfair we have to make a decision on this without knowing all the facts,” he said.
Regardless of how that property comes in, Selle said commissioners can still pare down departmental budgets, after the Oct. 6 vote.