Oil Market Turmoil Likely To Have Economic Repercussions On Both State And Local Levels
Former Tulsa mayor Dewey F. Bartlett Jr. has seen a lot over his decades in the oil and gas industry, but he said he's never seen anything like this week's market turmoil, and never thought he would.
"Never," Bartlett said. "Not to this degree, and not this quickly. Not even close."
"It's as bad as it seems."
Bartlett said that the current crash, in which the price of West Texas Intermediate crude plummeted to below zero dollars a barrel for the first time in history, will have significant impacts across varied sectors and levels of Oklahoma's economy, including philanthropy and municipal services.
"The oil and gas industry has normally been very generous with their donated funds," Bartlett said. "But when companies are suddenly hit with a tremendous decrease in their revenues, they're going to start cutting costs. And one of the first things they're going to start cutting are donated dollars. They can't afford it."
Bartlett said that the plunge in prices will also likely lead to layoffs not only in the energy industry but also in adjacent industries, such as manufacturing and transportation. That increase in unemployment across the state, Bartlett said, will contribute to a decrease in sales tax revenues collected by localities.
"Every municipality in Oklahoma, their only source of tax revenue they can look to is that from sales taxes," Bartlett said. "Period. If retail sales are dropping, the amounts of money that cities are going to receive will be dropping."
"Communities won't be able to pay salaries for as many police officers as they used to," Bartlett said. "They won't be able to spend money on repairing the water or sewer system. The streets that would normally be repaired won't be repaired."
At the state level, Bartlett said he expects the projected state budget shortfall of over a billion dollars will also cause pain.
"How's that going to be made up?" Bartlett said. "They're going to have to have a lot of cuts themselves."
"The oil and gas industry having problems," Bartlett said, "has very significant effects and impacts upon the entirety of Oklahoma."