Opinion Columns & Blogs

Falling oil prices might hurt state’s budget

Falling oil prices have been a windfall for Kansas motorists, but it might make the state’s budgetary problems a bit worse, the Lawrence Journal-World reported. Lower prices for oil and natural gas extracted in Kansas translates to lower state severance tax collections. Also, the appraised value of an oil or gas well is based in part on expected sales that year. Lower sales could mean lower property taxes, an important source of revenue for both the state and local governments. Last fiscal year, Kansas oil sold for an average price of $93.79 per barrel, the Journal-World reported. Last week it was selling for less than $50 per barrel. On the plus side, lower gas prices might cause Kansans to spend more on consumer purchases, which could mean increased state sales tax collections. – Phillip Brownlee