Oil and gas tax declines hurt Alaska, North Dakota revenues

Reuters News
Posted: Dec 11, 2014 4:09 PM

WASHINGTON (Reuters) - Declines in oil and gas severance taxes contributed to large drops in overall revenues for Alaska and North Dakota in the third quarter, a public policy research group reported on Thursday.

Alaska, which historically has relied on the oil sector for revenue, saw its total tax collections drop 74.3 percent in the third quarter of calendar year 2014 from the same period of 2013. In North Dakota, experiencing a natural gas and oil boom, tax revenues fell 46.7 percent in the quarter spanning July through September, said the Rockefeller Institute of Government.

In June oil prices began falling, and their new low levels have prompted concerns about the fiscal health of energy-dependent states.

Nonetheless, revenues rose from the third quarter of 2013 in many other states where energy production helps power the economy, including Texas, West Virginia, Pennsylvania and Oklahoma.

Most states saw tax collections rise in the third quarter, and overall state revenue was up 4 percent from the same period in 2013, according to data the collected from 48 states.

In the report Rockefeller added that it expects revenue growth will ramp up in coming months "if economic growth accelerates as expected."

The other states that saw declines included New Hampshire, where the drop was 3.3 percent, and North Carolina, where it was 6.5 percent. Kansas saw a drop of 2.5 percent, Wisconsin of 2.3 percent and Delaware of 0.5 percent, as well.

(Reporting By Lisa Lambert; Editing by Cynthia Osterman)