An economic and political crisis has been intensifying in Venezuela. A “Briefing” article in The Guardian today poses the question – “How did such an oil-rich state collapse so catastrophically?”
Texas isn’t Venezuela, of course. But that question may help highlight a nagging issue.
The Texas economy and state government finances benefitted from a massive tailwind amidst rapidly increasing oil prices from 2000 to mid-2014. But Texas state government finances don’t seem to reflect the tailwind like they should have.
For example, see the chart from State Data Lab linked here. It shows our “Taxpayer Burden” calculation for Alaska, Louisiana, North Dakota, Texas, and Wyoming, five relatively energy-intensive states, from 2009 to 2014. Texas and Louisiana have been persistently negative, in contrast to Alaska, North Dakota, and Wyoming.
In turn, with the dramatic downturn in oil prices since mid-2014, what might be revealed in Texas and Louisiana finances?
We are working on our analysis of these states for 2015 now. The proof may be in the pudding in 2016 and 2017.
Granted, they aren’t Venezuela, but …