Oil Revenues Help Other States

It may be the worst of times in many states, but it's the best of times in some. Sales and income tax revenue is drying up in California and Florida, but some mineral-rich states—New Mexico, Montana, and Wyoming, for example—are watching tax revenue grow from another income stream: oil.

In Alaska, where almost 90 percent of the state budget is fueled by taxes and royalties on oil and other minerals, the high price of oil has the state sitting on a roughly $3 billion surplus. Up north, the debate in the state Legislature isn't about what to cut but what to spend it on: A massive new hydroelectric dam near Anchorage is being discussed, as is an "energy rebate" that would hand out between $500 and $1,000 to every resident.

Texas, another oil-rich state, has built a $5.7 billion rainy-day fund over the past few years using gas and oil revenues, which usually account for only 3 percent of its total receipts. "Natural-resource-based states definitely did better in the last economic downturn," says Corina Eckl of the National Conference of State Legislatures. Those same states may stay high and dry this time around, too.