Less Oil Production Means Less Oil Money for Schools

Two Districts Are Hurting After the Refugio Oil Spill Shutdown

Vista del Mar Superintendent Emilio Handall
Paul Wellman (file)

More than two years after the Refugio Oil Spill, officials at two Santa Barbara County school districts are reporting their campuses have suffered serious negative impacts from the loss of oil production tax revenue.

“We’ve gotten just smashed,” said Emilio Handall, superintendent/principal at Vista del Mar Union School District on the Gaviota Coast. “We’ve seen a 35 percent reduction in our revenue. For a tiny, one-school district like ours, that’s resulted in massive reductions.”

When Line 901 ruptured in 2015, the three oil companies using the pipeline to transport crude oil north had to stop production. The same year, oil prices plunged. The county receives property tax revenue from oil companies based on a complicated formula used to determine their land value. The formula combines the current price of oil and value of reserves in the ground.

The impact of declining oil taxes on local school districts has emerged as a political fight ​— ​one that is going to intensify when the Board of Supervisors votes early next year on whether or not to allow Plains All American Pipeline to rebuild Line 901.

Oil-drilling proponents stress the losses to schools and fire departments as a result of the shutdown. As long as society relies on gasoline, they say, the county should reap the economic benefits. Environmentalists contend that oil revenue makes up just one percent of the county’s budget and that the boom-and-bust industry winds up hurting county coffers through the impacts of road maintenance, pollution, emergency services, and lengthy property tax appeals. What’s more, said environmental activist Katie Davis, trucking oil while Line 901 is shut down could cause deadly accidents on Highway 101. “How many lives do you want to put at risk for that extra $20,000 or $130,000?” she asked.

The way by which oil money flows to schools is complicated. Not every school district is affected the same. Districts that are funded by property tax revenue are classified as “basic aid,” now known as “community funded.” They include the Vista del Mar, Santa Ynez Valley, and Goleta school districts. But their sizes and revenue sources and the oil-related properties within their district boundaries impact their bottom lines differently.

Vista del Mar has been forced to cut services such as multiple bus routes and extracurricular activities. It also had to eliminate six teaching positions and four classified positions and to combine grade levels in classrooms, said Handall, formerly an administrator at Santa Barbara Unified School District. The number of students dropped to 77 from about 130. Handall believes the school will stay “viable” in the long run, “but we have to remain creative in how we generate funding while this oil revenue is being withheld from the district.”

The Santa Ynez Valley Union High School District ​— ​made up of a high school and continuation school with a total of 950 students ​— ​has also been hit to a lesser degree. “For the short term, we’ll be dipping into our reserves,” said Superintendent Scott Cory. “In the long term, we’ll have to reconcile that loss.”

Santa Ynez Valley school district offered retirement incentives to some teachers and did not refill a handful of positions, Cory said. Class sizes had to increase slightly. While “basic aid” can be advantageous to a school district because it often receives more money compared to other funding formulas, it is also more vulnerable to fluctuations, Cory said, explaining that problems arise when a district uses a spike in oil revenue to create new programs or positions.

Although the Goleta Union School District has had a drop in oil and gas revenue since 2015, the school district is fiscally sound, according to school boardmember Susan Epstein. It has not had to make any cuts to programs or personnel, she said. Epstein noted oil revenue has made up just 1.5 percent of the district’s overall budget ​— ​$40 million ​— ​for 20 years.

California’s school finance landscape has changed dramatically in the past few years, Handall said. Campuses were further impacted when the State Legislature revised the “district of choice” program. A third of Vista del Mar’s students were from out of the district. Still, it receives $16,000 per student. While that’s a lot for large districts, Handall said, “It barely gets us where we need to be.” Yet he believes the school on the coast will get through these tough times as it approaches its 100th anniversary.