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Beebe's error on severance tax Wednesday, Feb 6, 2008 By David Sanders Out of nowhere, Gov. Mike Beebe announced a couple weeks ago that he would call lawmakers into special session if he and the natural gas industry could come to some agreement on an increase in the state's severance tax in lieu of letting voters decide the issue via a ballot initiative in November. Apparently the governor believed he had the industry right where he wanted it. Sheffield Nelson had filed his proposed initiated act to raise the tax to a higher-than-reasonable level and Beebe was primed to position himself as a fixer - a role he relishes. But, almost as quickly as he offered himself up as an arbiter, Beebe remarkably changed course, suggesting last week that he might be ready to file his own initiated act to raise the severance tax. Why the position change? Perhaps he misjudged the situation. His skillfulness as a state senator was not developed by courageously leading the charge toward difficult policy positions. Beebe would always be seen hanging around the contentious issues, but he rarely extended himself. Rather than staking out a position at the beginning of an epic Legislative battle, Beebe waited patiently as enormous pressure pressed opposing sides closer to each other and where he stood unscathed, ready to broker a deal. This clever forbearance made him a legislative wunderkind. Last year he appeared to eschew his old lawmakers' approach by resisting the hint of compromise on his proposal to cut food tax in half. Beebe got most of what he wanted during his first legislative session as governor, and, as it ended, he appeared comfortable and confident in his role as the state's chief executive. But, given his situation - Arkansas' first Democratic governor in over a decade, who, in addition to winning his election with an overwhelming electoral majority, had the fortune of governing with one of the country's most Democratic state legislative bodies and $1 billion surplus sitting in the state treasury - anything less than a painless first year would have been unthinkable. To a certain degree he was insulated. His circumstances didn't required him to navigate controversial waters, which is why it's not surprising that when he invited controversy by forcing a "compromise" severance tax increase, he lost his bearings. Beebe's legislative fixes usually followed a major fight in which all the players - the governor, lawmakers and the affected interests - were forced to engage each other. But, with respect to the severance tax debate nothing has forced ALL the interested parties to the table. For months, Beebe has been the lone drummer, unable to rally lawmakers to his cause. When Nelson announced his ballot initiative, out-of-state gas companies began to feel some pressure, simply because their executives were told that if they opposed the tax increase, despite having poured billions of dollars into the Arkansas economy and created thousands of high-wage jobs, they could be painted as the evil out-of-towners who are "stealing" the state's natural resources. After Nelson filed his proposed ballot title with the attorney general's office, the governor tried to increase the pressure by inserting himself between Nelson and the natural gas companies. His inducement: He and the gas executives would agree to a reasonable increase in the severance tax - lower than what Nelson wanted, but higher than what the companies wanted to pay. Once they worked out the details, Beebe would call the lawmakers to the Capitol for a special session and they would send him a bill to sign. Moreover, there would be no need for the gas executives to subject their companies to a potentially costly campaign to fight Nelson's proposal and run the risk of being maligned in the process. But he erred: In order to increase the tax, three-fourths of lawmakers in both chambers would have to vote for it. Even with the governor raising the possibility of a compromise agreement, there are enough lawmakers willing to vote against a severance tax increase out of concern that increasing the tax could harm development of the state's booming natural gas industry that it would not pass. Faced with recalcitrant lawmakers and no agreement, Beebe has changed course. The one-time fixer has been reduced to threatening an industry that is important to the Arkansas economy. Clever forbearance? Hardly. ------- David Sanders writes twice weekly for the Arkansas News Bureau in Little Rock and is a host of the Arkansas Education Television Network's "Unconventional Wisdom." His e-mail address is DavidJSanders@aol.com. |
