Kern County, a vital region of the Golden State that has served California residents and businesses for decades, continues to face hurdles unlike any other county across the state. Kern’s longstanding commitment to feed and fuel not just California, but the nation, has been quickly forgotten by those making policy in Sacramento.
Over the last seven years, California counties have seen a 38 percent average increase in assessed property values. Unfortunately, the opposite is true for Kern County. The cumulative change in assessed valuation countywide since 2014 is only 3.93 percent.
The eight counties that share a border with Kern have seen an average 36 percent increase in assessed values since 2014, and the other Central Valley counties have increased an average of 45 percent since 2014. What’s striking and quite alarming, despite population increasing and new economic development, Kern County’s assessment roll has seen largely stagnant growth since 2014, falling behind all other 57 counties in the state and a full 10 percent below the next lowest county in California.
Why are property valuations down in Kern County?
While all other assessed valuations are up by nearly 37 percent in the county, oil and gas assessed property valuations are down by more than 64 percent. But what’s causing the significant shift with oil and gas property valuations? The answer is simple, Sacramento policies that are significantly curtailing oil and gas production across Kern County. As the state restricts the responsible production of oil, it’s not only impacting property tax values, but is also killing jobs, harming small businesses, and impacting residents who depend most on county resources.
It’s important to note, assessed property valuation forms the basis for property tax revenue generation, which is the principal discretionary revenue source of California counties. And in Kern County, property tax revenue accounts for 73 percent of total discretionary and locally controlled spending.
To make matters even worse, the state offers a solar tax exclusion exempting solar landowners from property tax, further reducing property tax for Kern County by $20 million per year.
Essential services and critical programs impacted
As a result of the significant decline in oil and gas property tax revenue, the county’s general fund and fire fund combined over the last seven years is down more than 64 percent, for a total loss of nearly $380 million. How can one county in such a short period of time sustain such a financial hit while trying to provide essential services and critical programs to its nearly 1 million residents? Another simple answer, it can’t. And in the short-term, the county is partially relying on a one-time commitment from the federal government as part of the 2022 budget, which is not yet reliable or sustainable.
Policies coming out of Sacramento continue to cost the county millions of dollars, over $500 million combined in the past 10 years, uniquely undercutting Kern County’s ability to invest in vital services and control our fiscal future.
Nearly $200 million in annual local property tax revenue from the oil and gas industry funds critical Kern County programs and essential services. As a result of these flawed and misguided state policies, the county is anticipating massive budget cuts to vital county programs and essential services. More than 20 percent of discretionary funds are expected to evaporate as state policies take effect, leaving the county to only operate what is mandated, resulting in cuts including:
• 7.4 percent ($80.5 million) of total general fund revenue
• 85.1 percent ($103.8 million) of funding for the Kern County Superintendent of Schools
• 13 percent of total firefighting revenue
• $12.2 million to fire, police, water, and other special districts
• $600,000 to incorporated cities
• 7.6 percent of total funding for the Kern Mosquito and Vector Control District
Governor Newsom promised that all “regions would rise together,” but Kern County residents continue to fall behind. There is an easy solution that will help everyone — the state should approve permits for the production of oil and gas to address high gas prices and by doing so the state will help Kern County recover the lost property tax revenue that it desperately needs.
By MICHEAL TURNIPSEED:
Michael Turnipseed is the executive director of the Kern County Taxpayers Association. KernTax is a member-supported, 501(c)4 nonprofit corporation with the mission to bring about a more accountable, effective, efficient and reliable government.
