COVID-19’s dramatic affect on Converse County’s economy is taking its toll, specifically on energy sector jobs and individuals who’ve been laid off because businesses were forced to close or couldn’t survive the sudden bust. Add to that an energy bust during a pandemic and, well, it could easily be a recipe for disaster in our county government.
In spite of that, oil prices are following a mostly upward trend and Converse County’s revenues look good, not only because the larger revenues are based on last year’s levels but because the county has a huge chunk in reserves.
In fact, the county will be carrying over $41 million from the current budget (which ends June 30) to the new fiscal year budget, according to preliminary numbers.
So while it might look bleak right now, some are beginning to see hope of stabilization, if not a turn-around in the energy sector and the loosening of the pandemic restrictions.
OIL PRICES Edge up
Oil, gas and coal prices plummeted for months, but the bright spot lately is oil prices are hovering around $30 a barrel, give or take.
WTI crude oil prices were holding at nearly $38 a barrel on Tuesday afternoon, according to oilprices.com, with Brent crude coming in at $40.54 and DME Oman at $40.62/barrel.
While prices are finally creeping back up and looking promising, it wasn’t but a couple of months ago oil prices were so low industry had to pay people to take their oil off of their hands.
The break even price—the price of oil needed to profitably drill a new well – is $50 per barrel, according to a report by Dallas Fed Energy Survey.
And, until that per barrel price holds steady at $50, rig operators may be hesitant to gear back up to full production and help to end the bust cycle we’re presently in.
CONVERSE COUNTY ‘OKAY’
And the good news goes on – Converse County Commissioner Jim Willox recently said he thinks the county “will be okay.”
For now, it appears the county is sitting pretty – or at least stable – as far as revenues go. As of May 31, the county had $41 million in total accessible reserves, according to Converse County Treasurer Joel Schell.
But, the county’s reserves (the total carryover number to the FY21 budget) is an unknown at this time, though $41 million comes close to covering the entire county budget of roughly $57 million for fiscal year 2019-20 – a budget which included some major capital construction expenses.
“We don’t close the fiscal year until June 30, so we won’t know until the first week of July (what the number is) after all accounts are closed and balanced,” he said. “I wouldn’t think the clerk would be close to having the calculation yet to determine reserves for next year.”
As to sales taxes, Schell said the county budgeted for $11.7 million in general sales and local option/one cent taxes for FY2019-20, with the actual amount collected slighter over $15 million – a difference of nearly $3.4 million more revenue than the county predicted for the current year.
County property taxes for the general fund were budgeted at $25.5 million. By the end of May, the county had collected $24.5 million, and the last month could push the annual total above budget, too.
“If there’s an excess as of June 30, it would just be part of the cash carryover for FY21. (It’s the) same with a deficit — it just decreases the cash carryover total and stays on the books as a receivable,” he explained.
The county valuation currently stands at $2.12 billion, a new record which will be broken once the fiscal year 2021 numbers are finalized. It is estimated to be $2.36 billion.
However, that number isn’t yet final as far as Schell knows.
“Those taxes will be billed in September,” he stated.
Last year the Budget reported the county had shattered it’s previous valuation records, with an incredible $2.05 billion in valuation, 150 percent above the 2018’s valuation of $1.36 billion.
The Wyoming Department of Workforce Services (WDWS) released a report Monday stating more than 19,000 individuals are collecting unemployment insurance in the state right now.
Last year during the week of June 6, there were just 1,776 people receiving unemployment checks.
There were more initial claims in Wyoming in March 2020 than in any other month dating back to 1997, the first year for which comparable data are available, according to Wyoming Laborforce Trends, a publication put out by WDWS.
Labor officials said the 10,203 claims in March 2020 were nearly twice that of the previous high in December 2009, which were 5,975 claims, following the national Great Recession.
Their monthly report lists Natrona County with the state’s highest rate of initial unemployment claims for the week ending June 6, with 295 claims vs. 48 claims at this time in 2019, an increase over the year of 514.6 percent. In comparison, Converse County saw 26 new unemployment claims for the same week compared to just six new claims at this time last year, still a whopping increase of 333.3 percent.
Overall, Wyoming saw the total number of initial claims increase from 1,414 in March 2019 to 10,203 in March 2020 — an increase of 8,789 claims – as COVID-19 hit the state’s economy hard, and at the same time, oil prices tanked at record low prices.
The state’s claims have risen to 1,550 claims for that week, vs. 379 during the same time period last year, a rise of 309 percent.
The Cowboy State’s unemployment rate rose from 3.8 percent in March to 9.2 percent in April.
Given the large number of layoffs and other economic disruptions associated with the COVID-19 pandemic, the increase in unemployment was widely expected, WDWS reported.
Job losses were seen across all areas of the state and in every major industry with the hardest hit sectors being leisure and hospitality, natural resources and mining, as well as retail trade.
Despite the large increase from March to April, Wyoming’s unemployment rate was significantly lower than the current U.S. rate of 14.7 percent.
All in all, unemployment levels continues to rise and many economists predict it will be years before they stabilize.