In layman’s terms, they mean the oil and natural gas industry is unstable. In Chicken-Fried News terms, we’re talking enigmas.
Despite industry unknowns, Oklahoma’s economy relies heavily on oil and gas, and it just so happens that gross production tax is one of the state’s top tax revenues.
Oil and gas companies pay a 7 percent gross production tax on wells drilled prior to July 1, 2015.
When oil prices are down, tax collections lag.
Over time, oil producers call for layoffs and lawmakers deal with budget shortfalls.
That’s why it comes as no surprise — at least to those who pay attention to news headlines — that Oklahoma’s personal income growth sank to No. 45 in the nation after third-quarter growth of only 1 percent, according to the U.S. Bureau of Economic Analysis.
Yikes!
Even grimmer news came last month when Oklahoma’s economy was the worst performer among all states in the second quarter, NewsOK.com reported.
Maybe it’s time to think outside of the oil barrel.
Dec. 28, the price of crude was at $36.81 a barrel.
It seems like a third-grader would tell state leaders to slow down the sipping rate on their oil-flavored Kool-Aid.
The real question is, how can state leaders ease the state’s reliance on oil revenues, and will anyone drink that Kool-Aid?
Cheers.
Print Headline: Kool-Aid drunk
