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Bob Johnson's yes and no Thursday, Mar 13, 2008 By John Brummet Gov. Mike Beebe had just announced that he'd come to terms with the natural gas exploration industry on raising the severance tax. But he had warned that this was not what you could call a done deal, considering that a three-fourths majority vote of both legislative chambers would be required. So I dialed Johnson Brothers in Bigelow. And I asked for one of them. That would be state Sen. Bob Johnson, who pretty much runs the Senate and, last we heard, didn't want to raise this severance tax. But he is widely considered close to some of the Stephenses, who have natural gas elements of the empire. And those elements were said to be agreeable to this deal. "I've been waiting for your call," Johnson said. He said he needed for me to advise him of the particulars. Somehow I figured he already knew them. But I commenced going through details. You'd have your deductions from the higher tax in the early years. They would vary according to the production of the wells. And then you could seek an extension in the deduction period depending on well performance. "Good Lord," Johnson said. "Sounds like we've managed to get some government into this deal, doesn't it?" So let's get down to it: Was he going to oppose this or not? At this point I could go into detail about his verbiage, and, actually, I'll get back to some of his arguing in a few paragraphs. But I want to go ahead now and presume to characterize what he said. Here goes: He will oppose this increase as the state senator representing a district heavily dotted with new Fayetteville Shale wells. He will speak against it and vote against it. But he will not oppose it in the context of his role as a leader of the Senate known for an ability to bring a dozen or more votes with him. He needs to stand by his constituents at home. But he does not need to lean on fellow senators whose highway contractors, highway commissioners, county judges and mayors will be leaning on them to vote for this proposal because the proceeds are to be dedicated to state highways, county roads and city streets. Let me explain one thing about the Arkansas Legislature: A three-fourths majority is near-prohibitive, but not wholly prohibitive. What makes it merely near-prohibitive is the influence of a coalition encompassing the governor, the Highway Commission, highway contractors, the Association of Arkansas Counties and the Arkansas Municipal League. Add to that the grudging acquiescence of the affected industry, and you have something not at all prohibitive. Johnson knows that well. So he'll vote no. He'll take to the well of the Senate and argue in the negative. But he's too smart to go to the mat on this one or try to pressure any colleagues to come with him. He's going to be president pro tem next time. He doesn't need to ascend to the big chair with his troops demoralized or abused. So, anyway, I mentioned that I'd get back to Johnson's argument. It's that it makes no sense to punish an industry that's already here making investments and providing jobs when we sacrifice our first-born children, practically, to try to recruit windmill blade manufacturers. It's that there are potential new natural gas shale plays in Mississippi and Georgia, and we shouldn't take this boon for granted. It's all about attractiveness to Wall Street. It's that the only way to raise real highway money is with bonds based on future federal turnback, not a few tens of millions in severance taxes. Beebe is talking millions when highways require dollar figures beginning with a "b," not an "m." Even if Johnson is right, and I'm not at all meaning to say he is, he's been undercut by the industry itself, which so feared an initiated act setting a higher rate that it caved to the governor's lesser proposal. ------- John Brummett is a columnist for the Arkansas News Bureau in Little Rock. His e-mail address is jbrummett@arkansasnews.com; his telephone number is (501) 374-0699. |
