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| Fri, Nov. 21, 2008 |  |
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AG rejects group's severance tax ballot proposal Thursday, May 22, 2008 Arkansas News Bureau LITTLE ROCK - Attorney General Dustin McDaniel on Wednesday rejected a proposed ballot initiative that would increase the state severance tax on natural gas and specify how proceeds from the tax would be allocated. McDaniel said the measure, submitted by the Mena-based Campaign for Comprehensive Legal Reform, had several ambiguities, including how it would relate with the Legislature's recent increase of the severance tax. "A question arises as to whether your current measure would be 'inconsistent with,' or merely in addition to, existing laws that levy severance taxes," the attorney general wrote in an opinion. McDaniel's approval of an initiative's popular name and ballot title is required before supporters can begin gathering the nearly 62,000 signatures necessary to get the measure on the Nov. 4 general election ballot. Kerry Hicks of Mena, chairman of group supporting the measure, could not be reached for comment Wednesday. A telephone number in Oden he filed in December was disconnected, and Hicks did not have a directory assistance listing in Mena. Under the group's proposal, the severance tax that companies pay on natural gas they extract in Arkansas would increase from the current three-tenths of 1 cent per 1,000 cubic feet of gas to 7 percent of the market value of the gas at the time and point of severance. Sixty-five percent of the proceeds would go to construction or repair of streets, roads and bridges in the state; 28 percent to the state Department of Human Services for child protective services, foster care services and facilities; and 7 percent for to financially struggling school districts. The Legislature in April enacted the first severance tax increase in 50 years. The measure, approved in a special session, raised the rate to 5 percent of the market value of the gas, with reductions for some wells, beginning Jan. 1. Gov. Mike Beebe negotiated an agreement with gas companies operating in the state. The increase is expected to generate about $57 million next year and an estimated $100 million by 2013. All but 5 percent of the additional revenue is earmarked for state and local road improvements. The rest will be divided three ways. About $660,00 will go into general revenue to replace revenue generate by the current tax. The rest will be split between the state Department of Environmental Quality for environmental policing of the area being developed by natural gas companies, and grants to cities and counties needing additional funds for road damage from the development. |
