|
|
| |
| Sat, Aug. 30, 2008 |  |
 |
|
||
| |
Nelson's severance tax proposal cleared for canvassing; Beebe working on alternative Tuesday, Feb 12, 2008 By Rob Moritz Arkansas News Bureau LITTLE ROCK - The state attorney general's office Monday certified former gas company executive Sheffield Nelson's proposed initiated act to raise the state severance tax on natural gas. Attorney General Dustin McDaniel's approval of the proposal's popular name and ballot title clears the way for Nelson to begin collecting signatures to put the measure on the November general election ballot. Nelson said he would blanket voting precincts during the May 20 state primaries to gather the nearly 62,000 valid signatures needed by July 7 to qualify for the general election ballot. "I think we'll have the votes" to pass the proposal in November, Nelson said. Also Monday, Gov. Mike Beebe, who opposes Nelson's severance tax proposal, acknowledged he was running out of time to gain legislative support for an alternative measure in a special session this spring. Beebe said his office is working on a proposal that possibly could end up on the Nov. 4 general election ballot. The governor did not disclose the scope of the measure he is considering but said, like Nelson, supporters also would rely heavily on the May 20 primaries for signatures. "If you're going to go and try to get signatures, you need to do that in and around primary time," Beebe said. The governor spoke after attending a news conference at the University of Arkansas at Little Rock to discuss construction of a $30 million Donaghey College of Engineering and Information Technology building, which is expected to open in late 2009. Nelson's proposal would raise the state severance tax from three-tenths of a cent per 1,000 cubic feet, one of the lowest rates in the nation, to 7 percent of the market value of natural gas at the time of extraction. The increase, coming at a time when natural gas exploration and drilling in North Arkansas in an area known as the Fayetteville shale play is booming, would raise as much as $100 million annually, according to the former Arkla Inc. chairman. Nelson proposes to allocate the proceeds for higher education, highways and city and county aid. Beebe wants all revenues from a severance tax hike earmarked for highway construction. Nelson said Monday he would not have a problem competiting with a Beebe proposal for signatures on May 20. "My hope is that the (gas) companies seeing that we now have the approval of one for the ballot and the intent of the governor, will have enough sense to sit down with the governor and settle this thing amicably," Nelson said. Beebe said he still has some hope the gas industry can come to an agreement on a proposal and that he can then take it to the voters in early March. But he said time is running out. April and May are not good months for special legislative sessions because of the May primaries, and in any event, getting the three-fourths majority vote needed in the House and Senate to pass a severance tax increase would be difficult, the governor said. "The odds of being able to get three-fourths based upon the statements that have been made by some members of the General Assembly, and based upon the fact that three-fourths is hard to get under any circumstances, it would be difficult in the absence of any sort of consensus from the industry," Beebe said. "We're still pursuing it, but we're not there. We're not close, actually." Sen. Bob Johnson, D-Bigelow, the incoming state Senate leader who opposes raising the severance tax, also attended the UALR news conference and said later it was too early for the state to even be considering a tax hike on an industry in the early stages of developing the potentially booming Fayetteville Shale play. "I think (a severance tax increase) sends the wrong message," Johnson said. "There is a very strong likelihood that these companies that are exploring this shale play wouldn't even be here today if the severance tax were that of Texas or other states." Beebe has said he wants the state's severance tax rate to be "comparable" to those charged by Oklahoma and Texas. Oklahoma charges 7 percent of market value and Texas charges 7.5 percent of market value. Both those states also have offered tax breaks to natural gas companies to encourage activity. "We're very early in the production of these wells," Johnson said. "We don't know yet what is the longevity of these wells ... we don't know." He also said raising the tax and using the revenue on roads would do little to highways across the state. "We need $5 billion for roads," he said. "It's a bad risk. Why chill potential economic development." |
