10 of the World's Most Expensive Megaprojects
From the Top Down: Ending Sexual Harassment in the Construction Industry
Spending Up for the Month, Down for the Year
Friday Funny: "Raising the Roof"
Tracking Technology Helps Construction Companies Save Money, Improve Safety
What The ‘Tech’ Just Happened to Meetings?
Weekly Grind: The Future of Construction Technology Across the Country
Friday Funny: It's Just Ergonomics
By Christina A. cassidy, associated press
January 25, 2017
Six of the country's major energy-producing states have slipped into recession after a sharp decline in production and exploration over the last 18 months caused their tax revenue to plummet and job growth to stagnate, according to a financial analysis released Tuesday.
Alaska, Louisiana, New Mexico, North Dakota, Oklahoma and Wyoming each saw negative growth during the most recent fiscal year, according to the report from S&P Global Ratings.
"Initially, the downturn was felt in state finances," S&P analyst Gabe Petek said. "Now this has really spread throughout their economies and highlights the risk of a concentrated economic base."
Alaska, which has relied heavily over the years on oil revenue to fund state government, has burned through nearly $13 billion in savings over the last four years to deal with the price declines in the energy sector.
The state has closed job and public health centers, inspections of restaurants in rural areas have been done only as time permits, state prosecutors have been focused on only the most serious offenses, and the state transportation department has cut back on equipment operators. The state has cut jobs, furloughed workers and is selling search-and-rescue aircraft and ferries.
The budget trouble is not limited to just energy-producing states, although they are among the hardest hit. A recent survey by The Associated Press of the state budget picture in all 50 states found that two-thirds of them are currently dealing with a shortfall or expect to confront one in the coming fiscal year.
Experts say state economic growth has been slower than expected, with tax revenue in some places failing to meet projections or keep pace with rising costs for health care, education, public employee pensions and other areas.
At the same time, states are facing budget uncertainty tied to policies advocated by President Donald Trump and the Republican-led Congress. These include a possible overhaul of Medicaid, which could result in less federal money for the state-federal program that provides health coverage for lower-income Americans.
It remains to be seen what effect Tuesday's decision by Trump to revive plans for the Keystone XL and Dakota Access oil pipelines will have on state economies. Supporters say construction of the pipelines will create jobs, although it's unknown how many or for how long.
The falloff in oil and gas drilling has dragged down the nation's economy as a whole for the past two years. Fewer drilling rigs have meant less demand for steel pipe and for the rail cars that ship oil and gas. Those cutbacks contributed to sluggish growth in the first half of 2016.
Yet there are few signs the struggles of the six states singled out by S&P will drag down the broader U.S. economy. Growth nationwide rebounded to an annual pace of 3.5 percent in the July-September quarter, and those states combined account for just a small share of U.S. economic output.
Oil prices have stabilized after members of OPEC agreed to cut production, limiting supply. Petek said that likely will keep prices where they are now, but they are unlikely to return anytime soon to the highs seen before the current energy slump.
In Oklahoma, where nearly one in five residents is employed either directly or indirectly by the oil and gas sector, lagging energy prices have triggered declines in income, sales and motor vehicle tax collections. A $1.3 billion budget shortfall last year led to major cuts to programs and services. Lawmakers are facing another hole estimated at nearly $870 million, or about 12 percent of state spending, for the fiscal year that begins July 1.
In New Mexico, the lower prices for oil and natural gas have sent shock waves through the state's economy and government finances. The state relies on oil and natural gas revenue to fund about one-third of its budget and has depleted a reserve fund that once stood at more than $700 million, or roughly 11 percent of annual spending.
An emergency legislative package to address an $80 million budget shortfall would cut funding to local school districts, postpone construction projects and limit economic development incentives.
"Right now, we are dealing with a crisis situation," Democratic state Rep. Patricia Lundstrom said recently. "We have a lot at stake here. Are we writing bad checks? Are we lowering our bonding capacity? That really hurts local governments."
Associated Press writers Becky Bohrer in Juneau, Alaska; Morgan Lee in Santa Fe, New Mexico; Sean Murphy in Oklahoma City; and Chris Rugaber in Washington contributed to this report.
Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Weekly Grind: Tools You Need, Homes that Sail, and more!
That master strategist Sun Tzu knew a thing or two about out-thinking the competition. Turns out his focus on strategy over strength can be applied to gaining an edge in the construction industry. ... Read More
If you're a construction worker, you're most likely working physical labor and it can get hot if you're working under the sun. Here's a guide for h... Read More
As an architectural statement, the campus is a monument both to Apple’s corporate success and centrality to the global tech culture. At 176 acres, ... Read More
August 8, 2016
"Some of the cool things that we're doing on job sites today are with Rovers and the alive platform. Alive is that software platform that glues to... Read More
The National Association of Women in Construction has a new executive vice president. This change marks a “brand new day and brand new way” for the... Read More
Every construction business owner can learn a lot from competitors. But merely copying them won't do. You will just always stay one step behind. So... Read More
We've selected eight women from all walks of life to ask them one common question: what advice would you give women who want to enter the construct... Read More