Jul. 22—A booming real estate market overcame a slump in oil prices to lead to the highest-ever assessed value for properties in Kern County, the Assessor's Office reports.
In a year when revenue from property taxes was expected to decline, the Assessor's Office said the value of taxable property in the county increased by nearly $1 billion. That equates to about an $11.9 million increase in property tax revenue to the county, which had been estimated at around $280 million for fiscal year 2021-22, allowing officials to address a deficit that threatened to swallow vital resources.
The total assessed value for properties in the county was $103.5 billion on the 2021-22 assessment roll, a $0.9 billion increase from the year before.
"Last year was a record, this year was a new record," said Assistant Assessor Laura Avila. "I don't know, maybe we're on a new track to keep going, but we'll have to see how that goes with oil and gas."
A lower-than-expected decline in oil prices contributed to the elevated financial outlook. When the county began developing its budget for the new fiscal year, officials had anticipated a 30 percent to 40 percent decline in valuations. What they ended up facing was a 24 percent decrease.
"It's still a reduction, but it's better," said Chief Operations Officer Jim Zervis. "We also saw better-than-expected growth in secured property. So this is better than what we had originally anticipated and what the original estimates were for the assessor's office."
The county will use the funds to mitigate a $16 million shortfall, freeing up other funds to address infrastructure projects.
Supervisors are slated to vote on the final budget Tuesday. With funding from the American Rescue Plan stimulus package, increased revenue from property taxes and $69.2 million in revenue left over from the previous fiscal year, the county finds itself on surprisingly solid ground.
"We feel good about where we're at. We're seeing the benefits of the decisions that were made in the past to reduce expenditures," Zervis said. "We're definitely better positioned, and we're optimistic."
As property values across Kern County have increased, the proportion of value coming from oil has diminished. In 2012, when oil prices were evaluated at $95.50 per barrel, oil properties accounted for 35 percent of all value on the Assessor's rolls. In 2021, with the assessed price of oil set at $50 per barrel, oil properties make up only 11 percent of the roll.
"We're at a point where we're really living within the means," Zervis said. "Having oil and gas at 11 percent is probably a good place to be in terms of balancing our budget."
The total value of property in Kern County could be higher if the county received revenue from the property taxes of large-scale solar projects. Currently a state property tax exclusion bars property tax from being collected on large-scale solar properties.
Those properties are kept off the Assessor's rolls and supervisors have toyed with the idea of protesting the exclusion. The Department of Planning and Natural Resources estimated in a 2020 study solar projects could generate slightly less than $20 million per year for the county.
The tax exclusion is scheduled to sunset in 2024. In the meantime, supervisors will have to content themselves with a booming real estate market and new businesses like Amazon that have pushed up property values across the county.
You can reach Sam Morgen at 661-395-7415. You may also follow him on Twitter @smorgenTBC.