County finalizes budget, talks financial future
San Juan County Commissioners look at alternative revenue streams as tax revenue from struggling oil and gas industry continues to decline
- The San Juan County Commission voted to submit a final draft of its budget to the state for approval.
- The budget for the upcoming fiscal year calls for a 9.5 percent reduction in revenue because of a drop in tax revenue due to the oil and gas industry.
- Commissioners also passed a resolution encouraging Congress to continue funding the Payment in Lieu of Taxes, which compensates counties with large amounts of federal, tax-exempt land.
- The county also heard about the state of the Health Care Assistance Program, which covers medical costs for uninsured, low-income residents.
AZTEC — The San Juan County Commission examined its financial position today, passing a budget for the next fiscal year and discussing future funding issues at the state and federal level.
Commissioners voted to submit a final draft of the county's budget to the New Mexico Department of Finance and Administration for approval. The plan predicts a 9.5 percent reduction in revenue, which is expected to drop from $105 million in this fiscal year to $95 million in the upcoming year. The county has prepared to buoy itself with $19 million in cuts to expenditures, including spending about $2 million less on roads. Chief Financial Officer Jim Cox said the budget will leave $11 million in operating reserves.
"That’s a pretty healthy reserve to have," Cox said.
Commissioners have pointed to a reduction in tax revenue stemming from a struggling oil and gas industry as the reason for the budget woes. With the county's main funding source in decline, officials today stressed the importance of maintaining alternative revenue streams.
Following the approval of the budget, the commission passed a resolution encouraging Congress to continue funding the Payment in Lieu of Taxes, or PILT, program. PILT allocates money to counties with large tracts of tax-exempt, federal land. The program is scheduled to continue through 2018, but County Executive Officer Kim Carpenter said there’s a risk of Congress scaling back payments.
"Once again, PILT seems to be under attack at the federal level," Carpenter said.
He said about 25 percent of the county is federal land, and PILT funding provided $2.4 million in the past fiscal year. The resolution will join a collection of testimonies being submitted to New Mexico's congressional delegation by the state's Association of Counties.
"We want to make sure our voices are heard," Carpenter said.
In addition to federal policy, the commission also discussed how to continue operating a state-mandated Health Care Assistance Program.
HCAP covers medical costs for uninsured, low-income residents. Liza Gomez, the county’s Indigent Health Care Coordinator, said the program is a vital asset for those who don't qualify for coverage under Medicaid or can't afford insurance under the Affordable Care Act, commonly called Obamacare.
But despite its importance, the program is expensive, costing the county about $6.6 million in fiscal year 2016.
"We’re spending more than we’re taking in," Carpenter said.
Gomez said the county has already reduced HCAP's overhead by lowering income level requirements and imposing lifetime limits on using the program, but difficult decisions still remain.
"We want to know if there’s a future for HCAP," she said.
Commissioners said they will address further cutbacks at their next meeting on Aug. 9.
In other actions, the county approved the purchase of land to build a new fire station in the Lee Acres district. The county will pay $65,000 for three acres of land along County Road 5500. County Fire Chief Craig Daugherty said the department needs an extra station to serve new residences in the area. The purchase will come through an existing bond and was an easy sell to commissioners.
"It’s for safety," Commissioner Jack Fortner said. "How can you say no? Especially if we have the money."
Brett Berntsen covers government for The Daily Times. He can be reached at 505-564-4606.