WASHINGTON—Slow and steady may still win the race, even in the turbulent economic world of oil and gas drilling.
The Eagle Ford shale play, a large area of south Texas that thrived during the drilling and fracking boom, experienced a significant economic downturn after the late-2014 collapse in oil prices. But unlike other affected producing regions in the United States, the Eagle Ford play—new to the fracking era—had far less experience with oil and natural gas county booms and busts. In a new blog post, Resources for the Future (RFF) Senior Research Associate Daniel Raimi looks at three counties in the affected area and how they fared under distinct approaches to managing revenue during volatile times.
The new blog is, “Managing Revenues through a Downturn in Texas’s Eagle Ford Shale.” The counties observed are DeWitt, Gonzales, and Karnes. And the results are telling.
Karnes County sharply cut tax rates then raised them relatively slowly when demand for services and infrastructure upkeep had largely outstripped revenues.
Gonzales County experienced an impact from development that has been “slightly” positive, but the revenue cycles also have been a challenge for maintaining roads.
DeWitt County kept its tax rate fairly stable, enabling substantial capital expenditures on roads, equipment, and other infrastructure, resulting in a large net positive fiscal impact.
The post ends with a photo that would seem to prove that a picture is indeed worth a thousand policy lectures: It is of a frequently traveled road. The well-paved lanes in the foreground are maintained by DeWitt County. The degraded lanes in the background lead into Gonzales County.
Read the full blog post: Managing Revenues through a Downturn in Texas’s Eagle Ford Shale.