Florida One of “Top 10” Benefactors Of Cheap Oil

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Which States Benefit Most From Cheaper Oil? (Source: Resources for the Future – Based on Brown Yücel 2013 Research)

World oil prices have fallen by almost 50% over the past few months, which should be a net positive for the U.S.

But not everyone in the U.S. will come out a winner.

Eight states are expected to be hurt by lower oil prices – Alaska, Louisiana, New Mexico, North Dakota, Oklahoma, Texas, Wyoming and West Virginia.

These states depend on energy production to fuel state revenues and employment.

The other 42 states will benefit from lower oil prices, and few more than Florida, which as been identified as a “top 10” winner in the cheaper energy jackpot.

Lower energy prices act like a huge tax cut for consumers, and put more money in everyone’s pockets. That encourages Florida residents (and tourists) to spend. Florida is surpassed only by California and Texas in terms of gas consumption, so lower gas prices make a big impact here.

Plus, Florida relies on sales taxes for over half of the state’s total tax revenue, according to CNBC.

And of course, the more consumers spend, the more tax revenue the state rakes in.

The Takeaway: Lower energy prices will benefit American consumers and states like Florida.

But let’s not forget – the flip side is that much of America’s recent economic and employment growth has been due to the U.S. shale, oil and gas revolution. (Consider that 40% of all new jobs created since June 2009 have been in Texas, according to USA Today). It’s too soon to tell whether the benefits of plummeting energy prices may actually boomerang and start to undermine U.S. economic growth.

 

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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