CALENDAR
September 29, 2015
Cancelling card doesn’t erase your credit history
September 29, 2015
Simultaneously, drastic drop in oil prices slashing parish’s sales tax revenue
A drop in global oil prices means the Terrebonne Parish government will receive about $2 million less than expected in mineral royalties.
The parish’s 2015 budget projected $5 million in revenues from mineral company royalties. However, parish chief financial officer Jamie Elfert said the parish does not expect to reach $3 million in royalty revenues this year.
According to Terrebonne Parish President Michel Claudet, the decrease for this year is connected to the plunge in global oil prices.
“We used to receive royalties based on $100 barrels of oil, and now we have $40 barrels of oil,” he said.
Claudet is correct in his assessment of the market, as oil sold for more than $100 per barrel in June 2014, and was selling for less than $40 in August.
The drastic drop in oil prices is also affecting the parish’s sales tax revenues as well. Terrebonne saw a 14 percent drop in sales tax revenue in the month of August, as the many locals who work in the oil industry have less money to spend.
Elfert says that the reduced returns on mineral royalties have affected projections for next year’s budget. Though she says the parish is still not sure about next year, 2016’s initial figure of $5 million could be too high.
“Between 2015 and 2016, we could lose as much as $4 million in revenues,” Elfert said.
Parish Councilwoman Beryl Amedee said the council has been working hard to rework the budget with the lower numbers.
“We have been making budget adjustments all summer related to reduced revenues the parish government is experiencing in relation to the current economic lull,” Amedee said.
However, the reduction in revenues won’t affect the day-to-day work of the government. The revenues from mineral royalties go toward future projects, according to Elfert.
“As of right now, we’re not cutting any operations,” she said. “We just won’t have any excess capital.”
Elfert explained that the future projects funded by these revenues are non-recurring projects such as roads, bridges, drainage projects, levees and fire trucks. Claudet said all the projects currently underway will not be affected.
“The good part about all the projects we have going on here, every one we have I believe is funded,” he explained.
Elfert backs up this notion, saying that the projects supported by the mineral royalties do not start until the money is readily available.
“We wait until the money is in the bank, then plan the project,” she said.
‘Between 2015 and 2016, we could lose as much as $4 million in revenues.’
JAMIE ELFERT
Terrebonne Parish Chief Financial Officer
