County valuation is skyrocketing

Converse County’s assessed valuation – the number that determines how much the county, city, special districts and schools receive in property taxes – has skyrocketed to a record-high $4.38 billion this year. This is a drastic uptick of about 37% compared to its $2.76 billion valuation in 2022, which was the previous record.

That valuation puts Converse into the top three counties for valuation in the state, with Campbell still coming in at number one. Teton, Sublette and Sweetwater counties “are right in the mix” for the top five, according to County Commission Chairman Jim Willox.

The yearly valuation is also a sort of gauge for how the county is faring economically, although following its trend rather than single-year movement tends to give a more accurate portrayal of this. And the trend suggests the economy is booming.

To put all this into perspective, the entire county’s valuation was a mere $1.74 billion in 2021. This was just over half of this year’s oil property assessment alone. While last year seemed optimistic, with the valuation jumping over $2 billion for the first time since 2019, when the valuation rose from the previous year’s $1.36 billion to $2.1 billion, this year’s valuation has blown that number out of the water.

This is also without Converse County collecting tax on coal, unlike Campbell County. Converse County hasn’t seen property tax from coal since 2021, which was then valued at $8.7 million. As mining operations like North Antelope Rochelle Mine-Peabody mine are further north and outside of county limits, the county loses those property taxes.

Where the money comes from

While this state-assessed valuation certainly seems optimistic, the brunt of this increase stems from the estimated value of oil and gas in the county. Oil alone rose nearly 50% since last year from $1.7 billion to more than $3 billion. Gas rose from about $400 million to $610 million, a nearly 35% increase. However, the infamous boom-and-bust cycles mean these valuations may or may not stay that high in coming years.

“It depends so much on the prices of oil and gas,” Converse County Treasurer Joel Schell said. “We know we’ll see it decline.”

Schell continued that during certain months last year, the price of oil was valued at $100 a barrel, but was closer to $73 at other points. So while the revenue ended up much higher than it had been, he and other county officials don’t expect it to stay there.

Although we may see it drop, these massive upticks still foreshadow good news for the county, which will see tax revenue top $120 million this year. For comparison, the county general fund budget each year runs in the $30 million to $48 million range. For 2023, the county has budgeted $129 million but the county commissioners put a large amount of that into reserve funds (think savings accounts) and into Road and Bridge projects, according to County Clerk Karen Rimmer.

Where the money is going this year

Rimmer said the county increased the Road and Bridge budget significantly, from $8.9 million last fiscal year to $39 million this year, but that includes some major one-time projects.

The county also set aside $22.9 million to a so-called “true-up” fund, which is used to offset changes in energy taxes that may change once the state recalculates actual versus estimated taxes.

The commissioners also put $22 million into the county’s building reserve fund, while also increasing the property tax relief fund for some homeowners from $1 million to $2 million.

Tax Relief going out

The county is about to send out checks to nearly 200 residents who qualified for relief, to the tune about $100,000, which means those residents will get 100% of their property taxes back.

“We maximized (relief) based on what the state allowed us to do,” Willox said.

He noted the county was still levying the full 12 mill allowed by state law but the reason is fairly straightforward.

“83.5% of our valuation comes from oil and gas. Residential valuation account for 3.25% of the total county valuation, so you start there. So let’s say you cut a mill, that saves the average resident a $26 (a year based on a $275,000 home), but if you cut the mill for oil and gas, (the loss in revenue means) you won’t weather the (economic) storm that we know is coming.

“By saving the money . . . we create the ability to weather those storms and provide county services. But we don’t have much ability, within those 12 mills, to have much effect on the residential property taxes,” Willox explained.

The reason for property tax  increasing – especially as they have in the last few years – is the value of the homes, not the rate of taxation, Willox said. Except for special districts approved by voters in recent years, the mill levy hasn’t changed in Converse County for decades.

Unlike municipalities like the City of Douglas and towns of Glenrock and Rolling Hills, which rely heavily on sales tax but receive 8 mills on properties within their boundaries (so they don’t receive oil and gas revenues like the county does), the county receives the majority of its revenue through its property and severance (minerals) taxation.