Sweetwater County is in an economic downturn. That part is something almost everyone living in the county is aware of.
With the downturn, Sweetwater County’s revenue will decrease due to a drop in oil, gas and coal valuations. According to Sweetwater County Treasurer Robb Slaughter, economic downturns are a fact of life for any county dependent on minerals as a source of revenue. In the past, economic downturns have traditionally impacted the county for one fiscal year. Slaughter, who has 30 years of experience working in the treasurer’s office, said a rebound often takes place about a year after an initial downturn. Overall, Slaughter said if one were to look at the county’s valuations on a graph spanning several decades and adjusting for the peaks and valleys caused by mineral booms and busts, the valuation would show a slight, continual increase over time.
Even with the current downturn, projected to last through the 2017 fiscal year, Slaughter said the overall valuation would continue that trend. However, one of his concerns comes from reports that the economic downturn may continue into the 2018 fiscal year, where it would impact the county valuation to a point where that gradual increase in county valuation would shift into a decline. Slaughter said he isn’t sure what the future brings, as experts and analysts attempting to predict the future of the economy can’t agree on what will happen.
There’s no question that the county’s current valuation will decrease as a result of decreased minerals activity. The county valuation is expected to decrease by between $600-700 million, from a value of $2.96 billion last year to about $2.3 billion this year. Slaughter said 60 percent of the county’s revenue comes from mill levies assessed from that valuation. The county can assess up to 12 mills from the total valuation and uses that money wherever the county commissioners see fit. By multiplying the valuation by .012, a quick estimate of the county’s budget will result.
Using the $2.96 billion valuation, the formula results in $35.5 million generated from that mill levy. However, using the same formula with the estimated $2.3 billion valuation results in only $27.6 million being generated, a decrease of nearly $8 million.
Slaughter said the county used 9.2 mills, or $27,232,000 using last year’s valuation, for core county operations such as the sheriff’s office and the road and bridge department. The other 2.8 mills went to the county’s “satellite” agencies like Memorial Hospital of Sweetwater County, the Sweetwater County Library System and Southwest Counseling Services. MHSC and SCS have other means of generating funds, others like the library system don’t have those same opportunities. This equation will figure heavily into the next several months as the commissioners start to examine and draft a budget.
“It’s a real catch 22 … we’re so lucky to have (minerals), but when there’s a downturn in prices, it becomes a real hardship in budgeting,” Slaughter said.
While this scenario may sound like the county is headed for severe budgetary woes for the next couple years, Slaughter is quick to point out that while coal, oil and gas are down in value, trona continues to maintain a steady value. Also, Slaughter says it isn’t a question of if, but when mineral activity will return to Sweetwater County.
Once prices return to a point where money can be made through mineral exploration and development, activity will return as well. However, when that does happen is anyone’s guess.
Despite the economic downturn Sweetwater County is in, collection for the sixth penny tax may only last one month longer than expected.
Slaughter said tax projections made four years ago assumed collection at approximately $1.5 million a month. That was before oil, gas and coal values started falling in Wyoming.
“We didn’t see a decline in the economy as severe as its been,” Slaughter said.
The real average coming into the county is around $1.46 million and while that is $100,000 less than the projections, it only translates to the tax continuing a month longer than expected.
Reader Comments(0)