1)Despite the fact that the Texas economy has diversified over the past few decades, the energy industry is dominant in the state – the oil and gas industry especially. This can be beneficial when that sector is booming – which is have been recently – but not so much when it is shrinking – which has been the case since last summer. The price of a barrel of oil has shrunk by over a half. This can create problems for the state since a large chunk of tax revenue comes from the sale of oil and gas products. If the price decreases, tax revenue decreases, and since the state of Texas can only spend what it earns in revenue – this can create problems for the state budget and what programs can and cannot be provided for citizens of the state. What implications does the decrease in the price of oil have for the state budget (if any)?
