Kern County Declares Fiscal Emergency As Oil Prices Plummet
Kern County officials declared a state of fiscal emergency Tuesday as plunging oil prices devoured tens of millions in projected property tax revenue.
According to The Assessor’s Office, expected revenue for 2015/16 fiscal year dropped by $61 million, thanks to a 50 percent reduction in crude oil prices since the summer. That drop, coupled with soaring pension costs, will hit the general fund to the tune of $44 million, according to county budget director, Nancy Lawson.
Tuesday’s declaration will allow the county to dip into its $40 million reserve fund. It will also allow for staffing and benefit reductions within the fire department.
"We are looking under the rocks that are under the rocks trying to figure out how we can continue to maintain service and be ready to respond when someone dials 911," said Fire Chief Brian Marshall.
On Friday, Moody’s Investor Service said it would be reviewing the county’s credit rating for a potential downgrade. Both the drop in oil prices and unfunded pension liabilities could lead to “a material weakening of its balance sheet, to a level inconsistent with the A1 rating,” Moody’s said.
The petroleum industry is the bedrock of Kern’s economy, with oil companies accounting for 30 percent of property tax revenues.
Read more about Kern County’s fiscal woes here.