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Low oil prices mean big cuts for Kern County

Posted at 11:19 AM, Feb 04, 2016
and last updated 2016-02-04 21:42:17-05

Dozens of agencies throughout Kern County are facing budget cuts because of low oil prices. 

On Thursday one of largest energy companies, Royal Dutch Shell, announced their fourth quarter earnings. 

Because of the falling price of oil, the company's profit fell 56 percent in 2015 compared to the previous year. 

Locally, county agencies are also feeling the losses. 

On Tuesday, the Kern County Board of Supervisors made immediate cuts of $1.2 million dollars from the Kern County Sheriff's Office and $3.25 million dollars from the Kern County Fire Department. 

While KCFD is tracking within budget for the year, the assessor predicts a decline in property taxes for KCFD and anticipates a $20 million dollar shortfall for fiscal year 2016-2017.

KCFD said the money has actually been transferred to next years budget to help with the deficit, but now the department is trying to save money to preserve the fire stations. 

KCFD said they didn't have an academy last year and haven't hired for vacant positions in an effort to cut spending without cutting staff or fire stations. 

"When we start making cuts to our fire stations and our staffing, then we're actually impacting people's lives," said KCFD chief Brian Marshall. 

However, if the fire department loses more from its budget, the chief said closing fire stations may be inevitable. 

"The reality is, if there's no money, we have to make cuts," said Marshall. 

At the meeting the Kern County Assessor's analysis concluded that in 2015-2016 oil prices per barrel started at $99 a barrel and dropped to $54 dollars a barrel. The assessor predicts the price per barrel for 2016-2017 is projected at $35 per barrel.

KCSO has also explained what those cuts will mean for its agency.

The assistant county assessor, Lee Smith, said the outlook for oil isn't promising and may get worse. 

"Just exclusively petroleum was $34 billion two years ago. Last year, it was 19 billion dollars and this year coming up we would probably expect to see something to the order of half that," said Smith.

He said the long term effects of the low oil prices is impossible to predict because it all depends on when the oil prices will rise again.