Florida state economists are taking a second look at the methodology used by BP to calculate losses incurred by local governments due to last years oil spill.
BP, the oil company responsible for last years Deepwater Horizon oil spill in the Gulf of Mexico, used the rubric of the year-over-year decrease in local tax revenues from March and April 2009 to the same two-month period in 2010. Many local governments in the Panhandle, however, submitted claims based on revenues from the previous three years that came in below what BP has actually paid out using its methodology.
Officials from the state Office of Economic and Demographic Research said Thursday the BP method is flawed and doesnt take into account the turbulent changes in the economy during that time period. For instance, the economy was slowly coming out of a recession in 2010, which was being felt more harshly in 2009.
Its hard to do, because any time you compare the two years, it generally looks better (in 2010), said chief economist Amy Baker.
EDR officials said that BP argued it was better to use the spring months of March and April in their calculations because it was the Panhandles peak tourist season, bringing in travelers for spring break. But BPs method almost ignores the effect of the oil spill entirely, because the spill was caused by the Deepwater Horizon oil rig explosion, which occurred on April 20, 2010. That means all of 10 days is included in BPs calculation.
The city of Fort Walton Beach was the biggest loser in the discrepancy between the two methods. It submitted a claim of $289,577 in lost water and sewer taxes based on the past three years of revenues, but has received only $148,569 so far from BP.
Baker said the EDR will now try to calculate an appropriate amount for local government oil spill claims based on the agencys economic outlook projections from 2010 that did not take the oil spill into account.
State economists must also figure out how much to ask BP for in unemployment compensation claims.
The economic devastation brought by the oil spill seemed vast, but according to the Agency for Workforce Innovation, just 711 claims were connected to the oil spill.
AWI assistant director Tom Clendenning said they asked claimants if their job loss was related to the spill, then followed up with employers. If employers agreed, it was deemed an oil spill-related job loss. He also stated that the tab for oil spill-related claims so far is $2.3 million.
Kathy Hughes, AWI economic manager, suggested the spill had a chilling effect on hiring, contributing to the low figure, since the usual hires were never made.
That is another reason why the claims might be lower than expected, Hughes said.
AWI will conduct a survey over the next month with the 348 employers who reported oil-spill layoffs to see if there are other claims connected to the spill.
The EDR will be sorting out more BP oil spill-related claims Friday, when it takes on the spills effect on social services like welfare and Medicaid.
Reach Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859.
