The City of Long Beach's $20.3 million budget shortfall was in the news again last week. According to Press Telegram, Long Beach is navigating a challenging fiscal landscape with a proposed $3.6 billion budget. A significant factor contributing to this financial strain is Senate Bill 1137, which imposes restrictions on well and rework permits, directly impacting local oil revenue—a vital source of funding for the city.
For decades, Long Beach has relied heavily on revenues generated from local oil production to fund critical services. However, the California State Legislature has forced this change.
Long Beach Mayor Rex Richardson: "With the shifting legislative landscape at the state level and our city's commitment to climate action over the next decade, these oil production activities will gradually come to an end." This reduction plan includes losing $1.3 million from the general fund by fiscal year 2027 and increasing to $4.5 million by 2030.
However, Senate Bill 1137 presents a significant hurdle. The law, which bans new oil wells within 3,200 feet of sensitive areas, threatens to drastically reduce Long Beach's oil production capacity and associated revenues.
As Long Beach prepares for this potential financial hit, city officials are trying to find alternative revenue sources to maintain essential services and balance the budget. The immediate impact of SB 1137 and the resulting budget shortfall underscore the complexities and challenges of keeping its critical services fully funded.