As the oil recession continues, some are beginning to wonder if this setback could turn into a full-fledged oil bust like the one that deeply wounded many Texas small-town economies. Communities across the western part of the Lone Star State are seeing businesses shutter as jobs are cut and production is slashed. As the Texas Observer reports, towns in the Permian Basin and the Eagle Ford and Barnett shale regions are seeing unemployment rates rise.
Small-town businesses like hotels and restaurants rely on oil and gas workers for their revenue. When those workers lose their jobs, the effect creeps into other sectors.
To add to the state’s potential woes, much of the Texas economy relies on oil and gas tax revenue. But as profits dwindle, so does that revenue. If the downturn continues, Texas may have to dip into its Rainy Day Fund.