(The Center Square) – Louisiana revenues from oil and gas leases on locally administered public lands fell sharply in the latest fiscal year, reducing funding available for public schools, infrastructure projects and levee districts from Mooringsport to Port Sulphur.
Total cash bonus payments for state agency leases on these locally administered tracts plummeted to about $1.75 million in the 2025-2026 fiscal year-which officially ends on June 30-down from $6.0 million, or by 71.8%, from the previous year, Louisiana State Mineral and Energy Board data shows.
While the state mineral board manages these auctions, the tracts are local public lands with revenues statutorily dedicated to communities instead of Louisiana’s treasury. The decline in these locally administered leases mirrors a decrease across all leases on state land, which dropped to $4.3 million in the 2025-2026 fiscal year from $7.7 million in the prior year and from $14 million two fiscal years ago.
The leasing slowdown is hitting the budgets of the 10 to 12 core oil and gas-producing parishes in the northwestern and southern parts of Louisiana that include Plaquemines, Lafourche and Terrebonne in the southeast and Caddo, Bossier and DeSoto in the northwest.
In the June lease sale, total cash bonuses brought in about $475,000 but nothing was bid on the locally administered lands, which compared to $1.76 million in the same month last year. In the current fiscal year, the number of local tracts selected for bidding fell from 42 down to just 19.
During the 2024-2025 fiscal year, competition among producers drove the average price of leases on these locally administered tracts up to $3,161.91 per acre. In the 2025-2026 fiscal year, fewer bidders and less interest took the average down to just $1,032.49 per acre-a 67.3% plunge that left special districts and parish school boards capturing about one-third of the upfront cash funding received in the prior year.
This multi-million dollar drop in parish revenues comes at the same time Baton Rouge policymakers are changing the rules for companies drilling on state-owned lands and water bottoms. To encourage new oil and gas production, Louisiana regulators finalized a plan in March that slashes drilling royalty rates, which had been as high as 20.5%, to the statutory minimum of 12.5%.
When introducing the State Lease Investment Program, Louisiana Department of Conservation and Energy Secretary Dustin Davidson said officials attempted to balance oil and gas production growth with the funding needs of local communities.
“We want to make sure we are being responsive to the drivers of our energy economy, while still protecting the interests of our state and its citizens,” Davidson said. “This incentive structure is designed to attract long-term investment, but it requires a temporary rebalancing of our near-term revenue expectations.”
Louisiana Oil and Gas Association President Mike Moncla argues that regulatory relief is needed to reverse a long-term decline in the state’s oil production. Moncla notes that cost predictability is vital for independent producers to justify expensive projects. “When independent operators can reliably predict their costs, they can allocate more to supporting and expanding their workforce,” Moncla said of the royalty relief program. “Fairness and predictability lead to more investment.”
The locally administered funding traces back to historic land allocations known as Section 16 school lands, which generate mineral revenues for local school boards and parish governments throughout Louisiana.
In Caddo Parish, funding for routine maintenance at local campuses like Mooringsport Elementary is pinched when that broader parish fund shrinks, while across the river, Bossier Parish school planners must account for the volatile energy revenues while managing suburban growth.
In the 2023-2024 fiscal year, the Caddo Parish School Board received $1.21 million in combined lease and royalty revenues from mineral production. For the coming fiscal year, local school planners are budgeting for that funding bucket to drop to a baseline of $700,000, an amount provided entirely by a continuous stream of royalty payments each month.
In Louisiana’s coastal southeast, port authorities, levee boards, and municipal governments allocate funding from agency lease sales primarily to drainage systems, emergency pumps, and shoreline erosion defense.
The Plaquemines Parish School Board routinely authorizes mineral leases on coastal tracts to bolster school funding. In recent fiscal years, Plaquemines was frequently part of a core group of coastal parishes generating hundreds of thousands of dollars annually from leasing school lands.