State Senator Charles Perry visited with Lubbock's First News' Tom Collins and Laura Mac Tuesday morning to talk about how falling oil prices could affect the state budget and Texas's health care challenges.

Perry told Tom and Laura that the current drop in oil prices, while great for consumers, could have a negative impact on the state budget.

Once prices fall below $70 per barrel, Texas may need to rework its budget. Every $5 change in the price of oil could have a $200 million effect on the state budget, Perry said.

Sen. Perry estimated that $75 per barrel is the break-even price considering new fracking technology. In his opinion, $85 per barrel is the "sweet spot" where gas prices are reasonable and the oil companies are still making money .

The senator also discussed the potential impact the Keystone Pipeline would have on the state. He believes that unless refinery capacity increases, an increase in crude oil supply would not have a positive impact on gas supply and prices.

Sen. Perry brought up the possibility of a companion pipeline that would be used to carry fresh water from Canada and be used to recharge aquifers (such as the Ogalala) and river systems.

He also revealed that Medicare costs have become the largest part of the state budget, even exceeding education, for the first time in state history. That includes an additional $100 million earmarked for women's health.

To hear all of Sen. Perry's interview, click play below: