|
|
| |
| Mon, Sep. 8, 2008 |  |
 |
|
||
| |
GOP House members raise opposition to severance tax proposal Thursday, Mar 13, 2008 By Jason Wiest Arkansas News Bureau LITTLE ROCK - The House minority leader slammed Gov. Mike Beebe's proposal to raise the state severance tax Wednesday and said most other House Republicans oppose the plan. Rep. Johnny Key, R-Mountain Home, said the agreement Beebe unveiled a day earlier to increase the tax companies pay for extracting natural gas in the state would have "detrimental economic effects." The House Republican leader also said the governor's insistance that a consensus be reached before he calls a special session to consider the proposal, and that the measure not be changed, would circumvent the democratic process. "The concept that we rubber stamp a tax hike without debate or amendments, and do it right now or else, is a slap in the face of our democratic process," Key said in a statement released by the Republican Party of Arkansas. The governor announced Tuesday he had reached an agreement with the natural gas industry executives to raise the severance tax from one of the lowest in the nation to a rate more in line with surrounding states. Beebe spokesman Matt DeCample said Wednesday legislators would have been unlikely to vote for the measure if the governor had not first won the industry's approval, the first step. Legislators are the key second step in the process, he said. The tax hike would benefit the state's economy and job creation because the governor wants the proceeds earmarked for road improvements needed to help lure economic development prospects, DeCample said. The impetus for raising the severance tax is growing exploration in the Fayetteville Shale play, which is projected to provide a $5.5 billion economic benefit, including 10,000 new jobs, to the state by the end of the year. Supporters say that gas companies should pay a fair price for extracting a finite resource from the state. Key argued that raising the severance tax would jeopardize jobs provided by an industry already operating in Arkansas. "That specifically is my view, but I can tell you that I've been on the phone with a number of our members in the Republican Caucus and I'm going to say that at this point, we probably have 15 to 20 'no' votes (in the House) on the governor's proposal," Key said in a telephone interview. The Arkansas News Bureau contacted 15 of the 25 Republican House members Wednesday and none said they would vote for Beebe's proposal. Three said they were undecided and the rest said they would vote no, or that they were leaning toward voting no. Their reasons ranged from standing up for constituents who were royalty owners and would be affected by the tax increase to disagreeing with the way tax revenues would be allocated. Beebe said Tuesday the plan would generate about $57 million next year, and that proceeds would peak at about $101.6 million in 2015. Under the plan, 95 percent of the revenue would to road improvements. Of that, 70 percent would go for state highways, and counties and cities would receive 15 percent each. "$57 million doesn't even get you close to being able to issue a bond (for highway construction) and you're not ending up with much getting to the cities and the counties to do any kind of road repair," said Rep. Mark Martin, R-Prairie Grove. Other GOP legislators said they might be willing to vote for the increase if a tax cut goes along with it. "One of the first amendments I'd like to see is some kind of tax deduction on the retail side," Key said. "If that could be part of the discussion there'd be a lot of members in the Republican caucus that would certainly find it more palatable." Beebe said Monday it would be difficult for him to "support much in the way of any modification to this proposal," which he said took months of negotiating before representatives of the natural gas companies agreed to support it. State GOP Chairman Dennis Milligan called the proposal "an opportunistic tax," and encouraged lawmakers of both parties to "protect our economic interests" by keeping taxes low. Arkansas' current severance tax of three-tenths of 1 cent per 1,000 cubic feet of gas produced generated $660,000 last year. Sen. Dave Bisbee, R-Rogers, noted that the party chairman didn't have a vote in the Legislature. "Folks in my district need highways," Bisbee said. "I'm for jobs over taxes, too, but you can't get to a job without a road." Five of the eight Republican senators contacted by the Arkansas News Bureau were undecided on Beebe's proposal. The other three could not be reached. "Most of us don't have information to know whether we're for it or not," Bisbee said. "My inclination is to sure look at it real hard." Beebe has said he hopes to call a special session by the end of March, before the political campaign season begins in earnest, and that if one does not occur he would push for an initiated act to put the measure before voters in November. For legislators to get a better look at the proposal and feel for the issue, Beebe might have to push back his deadline for a special session, Rep. Shirley Walters, R-Greenwood, said. "The session could be put off until the end of April and Gov. Beebe could talk with leaders of Revenue and Tax (committees) and leaders of the House and Senate and get put together a couple of meetings really quick," Walters said. "Gov. Beebe has always worked well with the Legislature, and I think he was just hurrying to work something out as quickly as possible and as fairly as possible to the people of the state," she said. ------- Reporter Rob Moritz contributed to this report. |
