From The New West Blog
Rural, Resource-Rich States Skirt Meltdown
By Matthew Frank, 10-10-08
As the national economic meltdown takes its toll, some out-of-the-way states are enjoying an economic boom, reports the AP’s Daniel Wagner.
These geographically and socially disparate states share two key characteristics, experts and officials said. They are isolated from major urban centers—and thus from the housing bust and loss of financial industry jobs that have hobbled other economies. And they benefit from an abundance of in-demand commodities such as coal, natural gas and grain, whose prices remain at historically high levels despite recent drops sparked by fears of a global recession.
In the West, Wagner points to Wyoming, which anticipates a $100 million budget surplus this year. Its economy has grown threefold since 2001.
And Montana, as reported yesterday, has a projected general-fund budget surplus approaching $1 billion, the product, according to a legislative report, of “a strong state economy over the past several years and a significantly stronger than anticipated growth in actual and projected general fund revenue collections (primarily individual, corporate and oil and gas production taxes).”
Other surplus states include West Virginia, North Dakota, Nebraska and Oklahoma.
But mineral wealth in the West does not guarantee economic strength: Wagner reports that Colorado, despite this year’s expected 84 percent boost in energy-extraction taxes, faces a $99.4 million shortfall because of lower income and sales tax collections. And Utah faces a $272 million shortfall.
Larger economic forces, Wagner concludes, “are conspiring to place some little-heard-from states at the top of the economic pecking order.”
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Normally I'm all for returning that surplus to the people. But in this case, no need to bother. The supposed $1 billion will disappear like a vapor as tax revenues and royalties fall off.