Clearwater County faces tough budget

Declining resource taxes made budgeting a challenge for Clearwater County.

Clearwater County aims to hold the line on residential taxes despite wrestling with declining resource taxes.

Council passed its $45.5 million operating and $26.9 million capital budgets last week.

Reeve Pat Alexander said council “made every effort to minimize spending without reducing services.

“We reviewed revenue forecasts and in particular the declining non-residential assessments and how these declining revenues might impact not only 2017, but future years as well.”

Alexander said council was “striving for zero” on resident tax rate increases to reflect council’s desire to ease the burden on ratepayers in tough economic times.

“We may see a little bit (of a tax rate increase) on the non-res(idential) side,” he said. “We’ve tried to put out a balanced budget out there that reflects as close to a zero tax rate.”

The official tax rate won’t be set until late March and early April when council has a better handle on all of its revenues.

Clearwater County saw a significant — $2.4 million — drop in taxes related to infrastructure, such as pipelines and power lines. Linear assessment, as it’s known, accounts for $24 million in revenues.

If non-residential tax rates are not increased, revenues will be less than previously, a gap that would have to be closed by either cutting or drawing money from reserves.

In the past when linear tax revenues have dropped, much of the revenue loss was offset by growth — new businesses coming in or expanding, and paying more taxes.

That has happened this year. Next year, is also expected to be slow.

“We don’t see a lot of growth happening in ‘17,” he said. “But we see it as a better year than ‘16 was but still nothing like we’ve had in the past.”

To offset projected revenue losses next year and in 2018, council opted to dip into $4.5 million in anticipated surpluses for those years.

“We’re fortunate that current and previous councils have set aside reserve funds as that helps alleviate the burden on the tax base when revenues are down or large-scale capital projects move ahead,” he said.

pcowley@bprda.wpengine.com

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