re: LA sales tax is highest in the nation

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For the first 3 miles out from the shoreline, Louisiana -- like other states -- gets to keep 100 percent of any royalties produced by oil and gas drilling. In the most recent year available, 2008, this amounted to $275 million.

Between 3 and 6 miles from the shoreline -- a federally owned band formally known as the 8(g) area -- the federal government sends 27 percent of the royalties to Louisiana. The reasoning is that federal drilling in this area sucks out some of the oil from deposits that span the 3-mile dividing line between state and federal ownership, so these payments are meant to compensate for the lost revenue to states. In 2009, they totaled $22 million and they're estimated to be $32 million this year.

Beyond 6 miles from the shoreline is considered federal territory. For new drilling projects, states get a 37.5 percent share directly to their treasuries and an additional 12.5 percent for state land and water conservation fund projects. The 37.5 percent figure alone amounted to $6.3 million for Louisiana's treasury in 2009, with additional estimated amounts of $558,000 in 2010 and $476,000 in 2011. Existing drilling projects do not currently provide royalties to the states -- a sore point for Louisianans. (More on that later.)

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