The Eagle Ford Shale Development and Local Government Fiscal Behavior

Document Type

Article

Publication Date

9-1-2016

Publication Title

Public Budgeting & Finance

Volume

36

Issue

3

First page number:

45

Last page number:

68

Abstract

Drawing on data gathered through a survey of local officials, this study examines the impacts of the Eagle Ford Shale development on the fiscal behavior of local governments in its region. This study focused on how gas and oil production influences local governments’ revenue generation, tax structures, abilities to handle fiscal stress, and revenue stabilization strategies. The findings provide insight that suggests strong tax revenue gains for these jurisdictions. In some instances, these revenue gains have allowed these governments to buffer themselves against fiscal stress and maintain some revenue that allows them to offset specific costs associated with local oil production. However, the long-term outlook of several of the localities in question makes them vulnerable to possible fiscal troubles. The short-term planning of spending coupled with the long-term expectation of oil and natural gas production may lead to many of these governments experiencing financial hardship when oil production declines.

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