State’s revenue recovery hampered by oil and gas slump, tourism

Despite historic declines at the beginning of 2020 as COVID-19 spread and slowed the economy, tax revenues for most states rebounded by the end of the year to near pre-pandemic levels—but not for Louisiana.

While most states’ tax revenues rebounded to near pre-pandemic levels, Louisiana Illuminator reports that by the end of the year, the Pelican State’s total 2020 tax revenues were 4.2% below pre-pandemic levels.

LSU economics professor Jim Richardson, who served 30 years as the economist on the Louisiana Revenue Estimating Conference, says Louisiana’s sluggish economic recovery is largely due to its reliance on the oil and gas and tourism sectors—the two major industries hit hardest by the pandemic. The oil industry had started to slump even before January 2020, and that slump was made worse by the pandemic.

“Two elements to the economy that took a disproportionate disruption were the oil and gas sector and the tourism sector,” Richardson said. The construction sector also suffered, particularly when large industrial construction projects halted during the pandemic, he added. Read the full story from Louisiana Illuminator.