Louisiana
The Bayou State is heavily reliant on oil and gas revenues to fuel most of its economy. The pitfall of such dependence is that when oil prices fall, Louisiana will take a bigger blow in case of a deep recession. Not only will oil prices drop, something that’s already started, with oil prices currently below $30 a barrel, but there will also be a drop in energy prices, caused by lower demand.
Louisiana has only 4% reserves from the state’s general fund, a far cry from the approximately 26 percent required to survive the economic crisis that financial experts have been warning about since last year.
Illinois
In an even worse situation is Illinois’s reserves, with only 1.6% reserves of the state’s general fund. An acute deficit in terms of pension funds, a dramatic level of debt and an everlasting budget shortfall caused by political rivalries are three of the difficulties the Prairie State has to overcome in order to increase its reserves. With a deep recession on the horizon, the problems will only get worse.
See also 13 Important Things That Will Become More Expensive in 2021.
