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Beebe: No special session on severance tax hike unless passage is certain Tuesday, Jan 29, 2008 By John Lyon Arkansas News Bureau LITTLE ROCK - Gov. Mike Beebe said Monday he will not call a special session to consider raising the state's severance tax on natural gas unless he is certain there is enough support in the Legislature for an increase to pass. "I've been there where we've had special sessions where the governor didn't have the votes, and you just languish," Beebe said. "So we won't call a special session unless I have enough people that have committed to vote for it, and it's a proposal that I think is fair and comparable to our sister states in this regard." Beebe said he does not yet have a specific proposal to show lawmakers, and he will not ask them for a commitment until he does. Beebe began discussing the possibility of calling a special session after former gas company executive Sheffield Nelson filed a proposal Jan. 17 to raise the state's severance tax from the current rate of three-tenths of a cent per 1,000 cubic feet to 7 percent of the market value of the gas at the time of extraction. Under Nelson's proposal, 56 percent of the revenue from the tax increase would go to state highways, 20 percent to colleges and universities, 12 percent to county aid and 12 percent to municipal aid. If Attorney General Dustin McDaniel approves the wording of the measure, Nelson will have to collect 61,975 valid signatures of registered voters by July 7 to place it on the November ballot. Beebe has said he favors raising the tax but would rather do so through legislative action than an initiated act - although he is willing to take a proposal to voters if the Legislature doesn't pass an increase. Beebe favors spending all of the revenue on highways. Early March would be the best time for a special session, Beebe said last week. Asked Monday if he has a specific tax rate in mind, Beebe said he wants to make Arkansas' rate "comparable" to those charged by Oklahoma and Texas. Oklahoma charges 7 percent of market value and Texas charges 7.5 percent of market value. Those states also have offered tax breaks to natural gas companies to encourage activity. Incoming Senate President Pro Tem Bob Johnson has said raising the tax could discourage development of the Fayetteville Shale play in Arkansas, which has seen a boom in drilling. Beebe said he is working to build a consensus among the major gas companies active in Arkansas on a tax increase that would be fair. If a consensus is reached, it may be possible to achieve the three-fourths majority vote necessary to pass a tax hike in the Legislature, he said. The fact that negotiations are going on behind closed doors does not mean that the public will have no say in the matter, Beebe said. "That's the way we've always tried to talk to people, one-on-one. That's how the democratic process really works, and then it's all out in the open when you do something and people have input," he said. |
