Thursday, February 18, 2016

8 states take a big budget hit due to falling oil prices - Bill Loveless, USA Today

As a group — Alaska, Louisiana, New Mexico, North Dakota, Oklahoma, Texas, West Virginia and Wyoming — count on severance taxes for 16% of their tax revenue, far more than the 0.2% reliance for the rest of the U.S. Severance taxes are determined by the value or volume of the resource being extracted, or some combination of the two. For the 12-month period ending in September, severance-tax revenue for the eight states fell by 35%, going from $15.5 billion to $10 billion. The declines ranged from 88% in Alaska, where low oil prices combined with waning North Slope production have devastated the state’s economy, to 16% in West Virginia, where coal miners are being laid off by the hundreds.

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