2022 Funding Challenges

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As we’ve been discussing with our community, the county continues to face financial challenges. The county has already made cuts within the General Fund to slow the rate of spending and balance the county’s budget – totaling $16.1 million in 2020 and approximately $8.7 million in 2021. These reductions have impacted essential public services such as public safety, roads and more.

Beginning in 2023, the county is facing up to an additional $20 million in cuts in the General Fund. Without support from our voters for additional funding, these cuts will reduce programs and services and the county will not be able to deliver those programs and services in the way in which the community is accustomed.

The General Fund supports every department and elected office in the county, with the exception of the Jefferson County Public Library. With more tough decisions ahead, we want to be sure that the community understands the factors involved and how these pieces fit together to shape the county’s financial reality.

Find out more by reading through the information below or watch our Funding Challenges Video Series.

Public Participation

It’s critical that your voice be heard. What are your needs and priorities? Which county services matter the most to you? How would you like to see the commissioners handle the budget challenges Jeffco is currently facing?

To hear from you, commissioners and county staff met with many groups between the months of January and June as part of the Community Outreach Meeting series to talk about and answer questions on the budget. They also held six Community Budget Forums in April and May for the public to come and hear more about the budget, participate in exercises to better understand the budget and ask questions they had.

A budget survey was also part of this website between the months of January and June to allow for those that could not attend any of those meetings to weigh in. Results from that survey will be published soon.

Visit our Public Participation page to see more on how you can now be involved and make your opinion known about the county budget.

What Services Does the County Provide?

The county’s primarily role is to administer state programs and state-mandated services, which is why counties are considered extensions of the state, and the county sits between the state and cities in terms of the population it serves. Essentially the county provides services that the state or cities don’t, and in many areas, the county provides municipal-type services for people who don’t reside in cities (or in the unincorporated areas of the county), like roads and law enforcement.

Jefferson County Funding Challenges, County Services image

In addition to the state, county and city governments, there are special districts established to meet other specific needs of the community, like public schools, fire protection, and recreation. While these special districts may serve or overlap areas of the county, they are separate entities. In fact, quite often people assume Jeffco Public Schools are overseen – and funded – by Jefferson County. They are not. The Jeffco Public School District has its own governing board and separate tax authority.

Similarly, Jefferson County Public Health and the Jefferson County Public Libraries have their own governing boards and do not report to the Jefferson County Board of Commissioners.

What seems to cause some of the confusion is the use of the word ‘county’ in these names. When people pay their property tax bill, they make one check out to Jefferson County. However, on average, only 24 cents of every property tax dollar collected by the county, actually stays with the county to provide services. The other 76 cents goes to the cities, schools and other special districts.

Amount of property tax dollar the County receives

These Funding Challenges are not New

The county has been discussing these funding challenges with our community for several years. In fact, in 2019 a ballot measure was presented to voters to address some of the revenue issues the county continues to face. However, since that measure did not pass, the county has had to implement additional cost saving measures and reduce spending in the General Fund by cutting or eliminating a variety services and programs.

These cuts have had already had real-world impacts on the community by reducing the level at which services are able to be provided. For more on these reductions and eliminations, see the graphic below and the 2020 Reductions and Eliminations web page.

Jefferson County Funding Challenges, Previous Reductions image

Why is this Happening?

In 2020 the economic shutdown caused the county to receive much less revenue than usual and as a consequence the TABOR formula automatically ratcheted down the revenue limit for the county. This means the county has much less revenue to work with and will once again need to make additional spending reductions to balance the budget. With more spending cuts, the county will be unable to maintain existing service levels or keep up with the growing demands from our increasing population.

Jefferson County Funding Challenges, Defining the Issue image

TABOR Revenue Limit Formula

As with any business or service organization, availability of resources largely determines the level and quality of the services that can be provided. In Colorado, the amount of revenue that can be received annually by local governments is determined by the TABOR revenue limit formula. This formula is calculated differently for state government, county and local governments, and school districts.

Each year, the TABOR revenue limit increases by a certain growth factor from the prior year. Because the county received much less revenue in 2020 due to the economic shutdown during the first year of the pandemic, the TABOR formula automatically ratcheted down the revenue limit approximately $14.5 million. This means from that point forward the TABOR revenue limit now grows from that lower starting point.

Jefferson County Funding Challenges, TABOR Revenue Limit Formula image

One consequence of this ratchet effect within the TABOR formula is that any revenue that falls above this lower threshold must, by law, be returned to the taxpayers instead of being retained by the county to provide essential services to the community. In 2021, Jefferson County property taxpayers received refund checks totaling $1.5 million, and due to the lower revenue limits, additional refunds in 2022 and 2023 of up to $9 million each year are anticipated. Visit the What is TABOR page for more information on these refunds and how TABOR works.

This ratchet down effect also contributes to the continuing gap between the revenue and expenditures, and that deficit has a direct impact on the reserves in county’s General Fund, which is forced to make up this difference. The problem is that this reserve (similar to a savings account) is nearly depleted and can no longer cover that difference.

Summarizing the County’s Current Funding Challenges

Jefferson County Funding Challenges, Summarizing Challenges image

Revenue Challenges

  • The general fund continues to experience a gap between revenue growth and the cost of doing business.
  • This continuing gap is compounded by the ratchet down in the TABOR revenue limit in 2020, meaning the county now has even less revenue with which to work.
  • Because current revenue levels will now exceed the lower revenue limit, any dollars above that limit must, by law, be returned to the taxpayers.
  • The continuing gap between revenue and expenditures and the required TABOR refunds have to be covered somewhere, and that has been the General Fund reserves. But those reserves are rapidly depleting.

Expenditure Consequences

  • With limited revenues and depleting reserves, the county has had to delay and postpone many critical infrastructure projects. This mounting backlog of projects is quickly approaching $400 million.
  • Without revenue solutions, spending reductions of up to $20 million will be necessary in the General Fund just to balance the operating budget, and with limited resources, the county is falling behind in the job market to recruit and retain quality employees.

Community Impacts

  • In the end, these revenue challenges have consequences on county spending, which in turn will have real world impacts to the services the county is able to provide to the community.
  • This means reduced levels of service in areas like public safety or snowplowing, roads and bridges will continue to degrade, and many people will likely experience longer wait times to process licenses and permits.
  • These areas are just a few examples of the potential impacts to our community if some immediate and structural solutions aren’t put into place.

Work Continues

The county will continue to evaluate all areas for opportunities for efficiencies, reductions, or eliminations. We will continue to work to prioritize the safety and well-being of our community and those things only government can do.

However, it is critical that we understand how our community would like to see the county address these funding challenges. Visit our Public Participation page to see more on how you can now be involved and make your opinion known about the county budget.