Article archive / January 1, 2015
Originally published: . Volume 6, No. 1. Source pages: 3.
The continuing drop in oil prices may be good for the country as a whole in the long-run, but Louisiana will have to further tighten its belt, something that will likely affect higher education and health care.
The Advocate interviewed the Commissioner of Administration, Kristy Nichols, last week who said, “We’re going to have to make some tough choices.” Everything will have to be considered, including “more cuts to higher education and the possibility of no merit pay raises for state workers,” Nichols said, according to the Advocate report.
Oil prices have recently hit a five-year low and they continue to slide. The price of oil is tied to the state budget because of royalties and taxes the state collects are linked to oil. For each $1 drop in oil the state loses about $12 million in revenues.
The Governor was already looking at ways to reduce a $1.4 billion shortfall, but this number is continuing to grow.
According to a number of analysts, fracking has put competitive pressure on the OPEC who is now reducing prices by releasing more oil in efforts to protect their market share.
This article is part of a historical newspaper archive. Read the original issue for its original layout, photographs and graphics.