Thanks to Newsom and Biden, the people of Kern County have lost 25% of their oil tax revenues. That means higher taxes, costlier gas and oil products and a cut in basic government services.
“But a staff report said circumstances since February called for updating the county’s assumptions regarding “volatility associated with the regulatory process of permitting oil and gas.” In early March, an appellate ruling told the county to make substantial changes to its environmental review before reasserting local control of oil and gas permitting.
Interim County Administrative Officer Elsa Martinez put up a chart showing oil property made up 55% of Kern’s total assessed value in 1986. Ten years later the share was 23%. In 2014 it came to 32%.
As a result of the county’s revised estimate, she noted, oil and gas property tax revenues is now projected to make up just 10% of Kern’s total assessed land value in fiscal 2024-25.”
This does not include the loss of well paying jobs, the effect on vendors and small businesses. This is how you create a DOOM LOOP.
Kern sees oil property tax revenue falling 25% amid permitting slowdown
BY JOHN COX, bakersfield.com, 6/30/24 https://www.bakersfield.com/news/kern-sees-oil-property-tax-revenue-falling-25-amid-permitting-slowdown/article_7969839a-365f-11ef-8c90-3b789f6d17e2.html
Oil permitting hold-ups are being blamed for a projected 25% drop in tax revenue, year over year, from Kern County petroleum properties.
The situation, a shift from the historical pattern of oil property tax revenues rising and falling according to barrel prices, led a local tax group to call for renewed pressure on Sacramento to address a sustained permitting slowdown.
State drilling permits have all but dried up under Gov. Gavin Newsom, but much of the local trouble originated with a yearslong legal challenge that continues to stop the county from resuming its system of approving permits in exchange for rules like paying into air pollution programs. Notably, a contentious law about to take effect will bar permits for an estimated 15,000 wells statewide.
The county projected as recently as January that oil property tax revenues would be flat year over year. That seemed reasonable given that oil prices were little changed from Jan. 1, 2023 — when assessors generally set the price at which oil properties are valued — to the same day one year later.
But a staff report said circumstances since February called for updating the county’s assumptions regarding “volatility associated with the regulatory process of permitting oil and gas.” In early March, an appellate ruling told the county to make substantial changes to its environmental review before reasserting local control of oil and gas permitting.
Interim County Administrative Officer Elsa Martinez put up a chart showing oil property made up 55% of Kern’s total assessed value in 1986. Ten years later the share was 23%. In 2014 it came to 32%.
As a result of the county’s revised estimate, she noted, oil and gas property tax revenues is now projected to make up just 10% of Kern’s total assessed land value in fiscal 2024-25.
Martinez noted that combined value of oil properties in Kern is expected to come in 64% less than a decade ago, when oil prices were at historical highs.
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The first member of the public in line to speak after Martinez’s budget presentation was the head of the Kern County Taxpayers Association, Michael Turnipseed. He opened with a reference to the oil and gas valuations, saying, “This is about as negative as I think it can get.”
“We projected this was coming because of what was going on in Sacramento,” Turnipseed added. He said Santa Barbara County this year cut its oil roll projections 21%, and that San Luis Obispo County slashed its estimated 26%.
He suggested the county gather information about the combined financial impacts of the Newsom administration’s oil policies on Kern, then take a trip to Sacramento “and say, ‘This is what you’re doing to us.'”
KCTA would welcome the county’s help, Turnipseed said, in contacting local nonprofits and asking them what size drop in donations they have experienced because of the industry’s local decline.
Board of Supervisors Chairman David Couch asked Turnipseed exactly what information he wanted the county to help gather. At that point Turnipseed noted local cities and school districts are being hit financially, too. The board took no action, directing staff to report back on the matter.
Martinez noted that, with oil property-related revenue expected to be down 25%, the county’s overall assessed value would probably finish the next fiscal year down 7% for a net, $10 million hit to the general fund.
A county revenue update is scheduled for late August, when the board is expected to take up a final hearing and adopt the budget. Additional discussions on the budget are planned for late July.
