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High approval rating gives Beebe leverage in push for severance tax hike Sunday, Mar 23, 2008 By John Lyon Arkansas News Bureau LITTLE ROCK - Gov. Mike Beebe will attempt to do something next week that has not been done in Arkansas in half a century. In a special session starting March 31, Beebe will ask lawmakers to raise the state's severance tax on natural gas. Raising the tax requires a three-fourths majority vote in both houses of the Legislature, an obstacle that political observers say could only be overcome by a governor with a good deal of political capital. Judging by available poll data, Beebe has it to burn. In the University of Arkansas' annual Arkansas Poll released last October, 70 percent of respondents said they approved of the job Beebe was doing as governor. Just 9 percent said they disapproved. Beebe scored even higher marks earlier this month in a poll commissioned by the University of Central Arkansas. In that poll, 82 percent said they had a "somewhat favorable" or "very favorable" opinion of Beebe, and 6 percent said they had a "somewhat unfavorable" or "very unfavorable" opinion. A favorable-to-unfavorable ratio of 3-1 generally is considered a solid approval rating, UCA President Lu Hardin said. Beebe's ratio is greater than 13-1. "I'm not sure if you polled a question on, 'How do you view motherhood?' you would have much more than 82 percent. This is really phenomenal," said Hardin, a longtime friend of Beebe who served alongside him for several years in the state Senate. In Beebe's first legislative session as governor, he signed into law the largest tax cut package in Arkansas history, including a 50 percent reduction in the state sales tax on groceries. He and the Legislature also increased per-student school funding by about $120 million, increased early childhood education funding by $40 million and parceled out a $919 million surplus Beebe inherited from former Gov. Mike Huckabee. Hardin said it was not only the results of the 2007 session that bolstered Beebe's popularity but also the way those results were achieved. "If the electorate turns on the news every night or reads in the newspaper every morning about conflict between the governor and the Legislature ... that does not yield itself to high favorability ratings," Hardin said. "There was very little conflict and very little negative publicity." This year, Beebe set his sights on raising the severance tax, currently one of the lowest in the nation at three-tenths of a cent per 1,000 cubic feet of gas. Beebe wants to charge gas companies 5 percent of the market value of the gas they extract, with reductions for some new or expensive wells. The administration projects the tax increase would generate $57 million next year and $101.6 million by 2015. Nearly all of the revenue would go to roads and highways under Beebe's plan. The 19th Amendment to the Arkansas Constitution requires a three-fourths majority vote in both houses of the Legislature to increase any tax that was in existence when the amendment was passed in 1934. That requirement has posed such a tough hurdle that no attempt to raise the severance tax has succeeded since 1957. It's unlikely a governor with a low approval rating would even try to get over that hurdle, according to Janine Parry, associate professor of political science at the University of Arkansas and director of the Arkansas Poll. "It's certainly not cutting a tax," Parry said. "It's not doing something that's uniformly popular, so it does seem like it could be the riskiest thing he (Beebe) has chosen to tackle so far. That's something that most rational public policy holders probably would not tackle unless they had really solid approval ratings." Patrick Williams, associate professor of history at the University of Arkansas, compared Beebe's fight for a severance tax hike to Huckabee's fight for school consolidation. Like Beebe, Huckabee had high approval ratings before taking up the issue - 70 percent approved of his job performance in the 2001 Arkansas Poll. However, Huckabee faced strong public sentiment, particularly in rural Arkansas, against the massive school consolidation plan he proposed in the 2003 regular session after the state Supreme Court declared the state's public school funding system unconstitutional in October 2002. Huckabee proposed consolidating all school districts with fewer than 1,500 students. The measure failed, and the regular session ended without a response to the Supreme Court. The Legislature eventually adopted a milder alternative to merge districts with under 350 students in a 2003-04 special session as part of broad education reforms, along with about $400 million in new taxes to pay for them. Huckabee allowed the school mergers and tax increases to become law without his signature. His approval rating in the Arkansas Poll sank to 47 percent in October 2003 but rebounded the next year to 58 percent. Williams said he does not believe the public is as passionately invested in the severance tax issue, but he said obtaining a three-fourths vote in the Legislature to raise a tax is a tough job nevertheless. "Think about how hard it is to end a filibuster. Think about how hard it is to override a presidential veto. This is even harder," he said. Beebe has several other factors working in his favor besides his popularity. Some who normally would vote against raising taxes may consider Beebe's plan preferable to former gas company executive Sheffield Nelson's proposed initiated act, Parry said. Nelson's initiative would raise the severance tax to 7 percent of market value with no exemptions. Also, the potential revenue the state stands to collect, thanks to a boom in development of the Fayetteville Shale play, may make raising the severance tax appear worth the political risk, Parry said. A recently revised estimate of the economic impact of drilling in the northern Arkansas region projects a nearly $18 billion benefit through 2012. Rep. Keven Anderson, R-Rogers, chairman of the House Revenue and Taxation Committee, said Thursday that Beebe's approval rating would not dissuade him from opposing a tax increase, which Anderson fears may dampen economic development, but he acknowledged that the governor's popularity is "bound to impact and improve his chances." Beebe's high approval rating is understandable after 2007's tax cuts, Anderson said. "Quite frankly, at this point I give the governor pretty high marks overall," he said. "This is really the first time since he's been governor that I've had a fundamental disagreement with how he's trying to solve a problem." Senate President Pro Tem Jack Critcher, D-Batesville, who supports Beebe's plan, said Beebe has a "strong bully pulpit" as a popular governor. "You take a returning legislator, he obviously has to consider that," Critcher said. "When you have those kinds of numbers, you have a pretty strong whip to crack." |
