Vail Valley officials brace for funding drop-off
VAIL – Facing growing projections of drop-offs in tax revenues in 2012, Vail Valley governments are preparing to make significant cuts.
“We’re expecting a veritable cliff of property tax revenue,” said County Commissioner Jon Stavney. “And we’re prepared for that.”
County Assessor Mark Chapin is estimating a median decrease of 30 percent in the value of residential property for the reappraisal that will go into effect in 2011. For property owners, that could mean lower tax bills. But for governments and special districts that rely heavily on property taxes, that will likely translate to a decrease in revenues.
The county isn’t doing any capital projects this year, and has delayed new road and bridge projects, Stavney said. It already decreased its staff by some 10 percent and cut its budget by 15 percent. But more might have to be done.
“We’re not surprised,” Stavney said. “We’re ready for it, but, yes, it’s looking like it may be even more than we had planned.”
Earlier projections put the drop in assessed value at 20 percent. Now, it’s looking more like 30 percent.
“We’re going to be reverting back to where the market had been in 2005,” Chapin said.
Vail’s real estate market boomed in the years leading up to 2007, peaking that year with total sales of nearly $3 billion. But that number fell to $900 million in 2009.
For the reappraisal in 2009, Eagle County properties, on average, saw a big jump in values. Valuations spiked by 13 percent on average.
The Eagle River Fire Protection District, which provides fire protection to 240 square miles from Wolcott to Eagle-Vail to Red Cliff, gets the lion’s share of its revenue from property taxes.
A 25 percent drop in property tax revenue would mean about a $1.8 million decrease in funds for the district, said Ed O’Brien, chairman of the board of the district. O’Brien said the district is already preparing for that drop-off and is looking for ways to cuts its spending.
“We’re not waiting until 2012 – we’re starting now,” O’Brien said. “We’re reviewing every single department, and every single level of expenditure, and at this time, nothing is off the table.”
The closure of a fire station is a possibility that hasn’t been ruled out, O’Brien said.
O’Brien added that, despite the cuts, the district is dedicated to keeping service levels, including response times, the same or better than what they are now.
“These are the challenges that we must address, and we must mitigate any adverse impact to possible closure of any facility,” O’Brien said.
Other districts may be less affected. The Eagle County School District’s funding is based on per-student amounts, and a shortfall in local property tax would be “backfilled” by state funding, said Phil Onofrio, chief financial officer for the district. However, if the state does not have enough revenue to backfill the total amount, the school district may have to make cuts.
In Vail, a large percentage of the town’s total revenue – 35 percent – comes from sales tax, while just 11 percent comes from property tax.
Staff Writer Edward Stoner can be reached at 970-748-2929 or firstname.lastname@example.org.