County audit focuses on the financial outlook; falling oil/gas revenue

The Stephens County Commissioners received a visit from Cameron Gulley, a certified professional accountant, during the Monday, September 28 commissioners meeting inside the Stephen County Courthouse.

Gulley presented an audit of all county funds and accounts for the fiscal year of 2019, and provided details on other items affecting the financial outlook for Stephens County, past, present, and future.

“We’re navigating tough times right now, Cameron Gulley said. “This audit is going to bear that out, and the year we are in now is probably going to be as difficult as the 2019 year was. As you go forward through the 2021 year, you all have made some difficult decisions and made some truly tough cuts that absolutely were necessary. Because 2021 will be a difficult year revenue-wise for Stephens County. Your tax base is continuing to hold down at suppressed levels as far as the assessed values. I think the next year, which is the 2021 tax levied year, is probably going to be the lowest evaluation year that the county has seen in a really long time.”

County and city officials of the community are continuing to prepare for a major economic decrease in the oil and gas revenue received yearly. The decrease comes as oil prices plunged more than 80 percent in April, falling to below zero dollars per barrel and has since continued to fluctuate as the COVID-19 pandemic stifles the country.

“Because the oil value is holding steady at about $40 a barrel,” Gulley said. “We have not seen that type of levied consistently at that level for that period of time in my lifetime. A number of years ago, oil dipped down to $20 a barrel but was only down there for a short time. It’s been staying right at $40 a barrel for this entire year. Which will have a substantial effect on next year’s values, when next year’s taxes are levied.” “West Texas Intermedi

“West Texas Intermediate, fell as much as five percent to $36.63 on Friday, October 2, as oil prices slipped below $40 a barrel to hit the lowest level since June. While global demand has risen from the depths of March and April, when it was estimated to be down by more than a quarter or about 25 million barrels a day, it is still about five-eight million below pre-crisis levels,” according to a recent article from the Financial Times.

“The county will see about a 20% reduction in values just on the oil and gas side of the tax base for next year,” Gulley said. “Fortunately for Stephens County, the tax value relative to oil and gas has been declining. As far as the percent of the whole for the entire tax base, as a percent, your tax base is approximately 30-35 percent on oil and gas value county-wide. Making the cuts that you all have made for the budget just adopted for the coming year, as absolutely essential to weather the storm that is still coming.”