Louisiana is one of six states that will have to address budget shortfalls in its fiscal year forecast because of lower tax revenues from job losses in the energy sector as oil prices continue to fall, Moody’s Investors Service says.
Reuters reports Moody’s comments on Monday came after Oklahoma revised down its revenue projections last Tuesday for the remainder of the current fiscal year by $444 million, or 8%, and by 13% for the next fiscal year, which starts July 1.
The other states are that could face budget shortfalls because of lower tax revenues are Alaska, Oklahoma, New Mexico, North Dakota and Texas. Moody’s noted New Mexico, North Dakota and Texas are more insulated from the fall in oil prices than the other states because their economies are more diversified and have substantial reserves.
The price of U.S. crude has fallen to its lowest level in seven years at just over $34 per barrel. The price has fallen nearly 70% over the last 18 months.
Gov.-elect John Bel Edwards has said he will call a special session of the state Legislature to deal with the current budget woes facing Louisiana, including revenue shortfalls.
