Alaska, Louisiana, New Mexico and North Dakota and other major resource states will see declines in oil-related revenues with the steep reduction in oil prices, Fitch Ratings says.
Although the impact varies widely, budgets for all the major oil-producing states could become less predictable in the near term if volatility in the oil markets continues.
The extent of the direct near-term fiscal impact will be dictated by the actual price's deviation from the state's forecast and the amount that oil production taxes contribute to the operating budget.
Louisiana's oil production and related taxes and fees made up 14% of that state's 2013 general fund budget.
Alaska's were approximately 92%. More broadly, the decline in gasoline and heating fuels will drive increases in consumer purchases and therefore support broad-based state tax revenues across the country.
