Over at Real Clear Policy, I look at how the collapse in crude oil prices are affecting the budgets of a variety of places dependent on oil and gas production revenue, specifically Alaska. Since Alaska does not have a state income or sales tax, an outsized proportion of its revenue has to come from that production revenue. When prices are so low, however, production slows, and the revenue plummets. Alaska now finds itself in dire straits, and it is not the only state to face this challenge:
In this respect, Alaska, North Dakota, and Texas are merely bellwethers, extreme examples of how energy booms can quickly become busts and the financial damage that busts leave in their wake. Crude prices could of course rebound in the short term and ameliorate a lot of these difficulties. But the stark economic realities at play here for states dependent on fossil fuel development will be a long-term challenge.
You can read the rest of the post at Real Clear Policy.