Sunday, November 6, 2011

Energy-Boom States Are Oases of Optimism In A Barren Landscape of State Budget Cuts and Layoffs

From the Associated Press:

"Resource-rich Alaska took in nearly $1.9 billion more than expected last fiscal year thanks largely to high oil prices and ended the fiscal year with an estimated $260 million surplus, an amount equal to nearly 4 percent of its general fund.

A handful of states — led by those that enjoy bountiful energy reserves such as West Virginia, Wyoming and North Dakota — have found themselves in similarly enviable positions, oases of optimism in an otherwise barren landscape of budget cuts and government layoffs. A few other states, including Massachusetts, South Carolina and Virginia, have combined slight increases in tax revenue with tight spending controls to produce modest surpluses.

In West Virginia, the surplus is going toward reserves, pension programs and debt. Wyoming put much of the extra money into savings after years of investing heavily in roads and schools.

And in North Dakota, which is experiencing an energy boom similar to the one Wyoming went through several years ago, investments included an extra $370 million for road repair and construction, especially in the oil-producing western part of the state. Some $340 million will go to schools over the next two years to help reduce property taxes, while $22 million will go toward a disaster relief fund for a state that has been inundated with floods in recent years.

At the same time they are saving and investing, North Dakota and West Virginia are reducing their corporate income tax rates, a move that could make them even more attractive to certain businesses."

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