Monday, February 7, 2011
Gas drilling Nelson promises severance tax initiative
Posted by Max Brantley on Mon, Feb 7, 2011 at 10:42 AM
As predicted here Friday, former gas executive and political candidate Sheffield Nelson announced this morning an initiative campaign to put a 7 percent gas severance tax on the 2012 general election ballot. You can read a summary of the proposed act, along with some background information here. Nelson also provided the text of the proposed "Natural Gas Severance Tax Act of 2012." The increase — Nelson said his tax would produce five times the roughly $50 million a 2008 increase produced annually — would go to state and local roads.
Is the Nelson announcement a ploy to encourage the legislature to improve the 2008 increase — which gave away far too much in cost recovery and allowances for old wells — as a compromise to a potentially much more expensive tax in the initiative? That worked in 2008. In the anti-tax era of 2011, it seems a long shot. Let's have a vote. The gas lobby is hard at work already compiling figures on their economic benefits and states with lower tax burdens. Will they move their operations from the shale to save a few pennies that are passed along to purchases already? They will not.
Matt DeCample, a spokesperson for Gov. Mike Beebe, said the governor had received a copy of the act from Nelson. "The governor has been talking with some legislative leaders and they're looking at some things that might be able to be done within the current law, some changes that might be able to be made. So that's where the governor's focus is right now. Like [Nelson] said in the press conference, it's a marathon not a sprint, so we'll see where everything's at after the session."
Nelson said he'd contribute to the cause, but didn't mention a specific amount he was willing to spend. He said the current tax fluctuates depending from 1 to 5 percent, depending on givebacks on types of wells, and that his proposal would put Arkanas in-line with such major producers as Texas and Oklahoma. He said companies are lined up to drill here and an increase wouldn't discourage activity. He said he's pitched his idea to legislators for the current session as a way to address highway construction needs.
Speaking of Sheffield Nelson, severance Tax
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Gas tax group alleges poll intimidation UPDATE
May 23, 2012Sheffield Nelson, who's leading a grassroots campaign to increase the severance tax on natural gas, said petition canvassers at primary polls yesterday were intimidated by representatives of the industry-funded group fighting the tax increase. /more/
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Don't cry for the frackers
May 16, 2012Another Markham Group mailer hit mailboxes today. Like the anti-casino mailer, it's another anti-democratic effort urging people not to sign petitions putting a gas severance tax increase on the ballot. /more/
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Turn out the lights
May 12, 2012The week's about over. The line is open. /more/
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Corporate puppetry continues on severance tax increase
April 23, 2012The chamber of commerce's full frontal attack on the severance tax increase — not yet qualified for the ballot — continues. /more/
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The secret battle against the severance tax
April 16, 2012Stephens Media today reports that it can't find any prominent politicians in support of the proposal to raise the gas severance tax in Arkansas. /more/
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Nelson on right side of gas tax debate
April 11, 2012Sheffield Nelson is an odd person to be waging a one-man crusade against the business and political establishment to raise taxes on the Texas and Oklahoma gas producers who have been drilling in the Arkansas shale. /more/
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Sheffield Nelson, unlikely severance tax champion
April 10, 2012Times columnist Ernest Dumas, who draws on nearly a half-century of coverage of Arkansas politics, including the essential role gas exploration and taxation have played in politics, examines today former gas executive Sheffield Nelson's somewhat role as a severance tax champion and his past leadership of the very business orgtanizations fighting him today. /more/
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Sheffield Nelson schools Beebe on severance tax
April 6, 2012I never really expected Gov. Mike Beebe, who cut his teeth golfing with the lobby in the Senate, to be a supporter of the Sheffield Nelson-backed initiative to raise the pitifully low severance tax on natural gas. /more/
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Stands accused
March 21, 2012Is the Arkansas State Chamber of Commerce "un-American," as Sheffield Nelson suggests? It's a close call; reasonable men might disagree. That the Chamber is unconscionable, on the other hand, was verified long ago. /more/
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Friday night fights are open
February 24, 2012The line is open. Closing out: * PULASKI SCHOOLS IMPASSE: The Pulaski Association of Classroom Teachers has declared an impasse in negotiations with the Pulaski County School District over redoing contracts because of the dire financial straits of the district, now in state receivership. /more/
- More »
Comments (6)
Showing 1-6 of 6
Can someone explain to me why this wasn't addressed before? The AR Times article covered the history, but why did Nelson watch the governor and the gas industry pass a bill that wasn't right for Arkansas? Seems to me that not enough attention was given to this bill in the first place. Sheffield may try to correct the mistake, but it will take a miracle to un-do this law. Just pathetic.
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Getting an appropriate severance tax commensurate with the negative environmental and highway damages attendent to natural gas production is way overdue. The fact that is was woefully underdone in the outset is not pertinent if we ultimately get it right. I would like to know how much Arkansas gas is exported outside our borders (I expect it is considerable) since any severance tax increase would be paid by those out of state users whose proceeds from same could be used to correct the damages done in Arkansas. This is an important factoid, if true, to offset any Arkansas anti-tax sentiment and Sheffield needs to make that argument to be successful with his efforts.
I agree the current severance tax agreement is not proportionate to the damage and expenses being incurred. This is not just a road issue but a protecting the quality of our State issue as we.
Perhaps some of the revenue from such a change could be used to help monitor and enforce some of the marginal environmental protection in place to regulate this industry. Additional field personnel are required to ensure the State is protected from this extraction industry.
Arkansas, always the ugly fat girl who puts out too easily and never gets to go to the dance.
Let's clean up our act and make those who score here, pay here.
Palin did it in Alaska. Biggest tax increase in the history of her state when she levied a huge tax on big energy. Maybe Sarah can come help a fellow welfare state get it right.
Downtowner, I think all the Arkansas natural gas, at least from Fayetteville Shale, goes out of state. Seems like this came out in 2009 when the severance tax hike was
in the works.
Here's is one scenario "B Rock Sucks." ". . . why wasn't this addressed before? . . ."
I will be accused of having an axe to grind, but usually, here in the United States of America and the almighty dollar, laws can not be made ex post facto (after the fact) nor can the law's effects be applied retroactively. So the politicians and lobbyists and their friends who will benefit from the weak law, either don't write a good law then correct it later on after their deals are assured of immunity and reap the benefits. Or repeal the law and then later on "realize" they were wrong and reinstate it.
This is a case of the former. There was a case of the latter. A state legislator got a part of the Arkansas Seismic Act repealed . . . the part where it required building additions of a certain size to require full and retroactive seismic structural improvements of the entire building.
After the legislator, a medical professional, added on to his office building in NE Arkansas in the New Madrid fault danger zone without seismic structural protections, he realized that the original law provided important minimal safety to occupants of buildings in earthquake hazard zones and got ir reinstated. Of course his building was exempt because it was added on to when the provision had been repealed. This saved him two or three times what he actually spent.
And who will pay for his savings? The people who occupy his building when the New Madrid Fault slips again. The medical professional and ex-legislator will be very sorry, but people killed or injured in his building will be victims of and Act of God not his rapacious greed . . . You betcha!
And who will be the beneficiaries of the severance tax delay, you'll have to dig into the ownership and lease records at county courthouses. We already know who will pay for it. . . . You and I and the rest of Arkansas. . . . and the money paid for the lease and drilling will trickle down . . . You betcha! (But will it fix the roads and the polluted ground water?)
Thus there are advantages to a managed legislature and legal system in the republic. . . . You betcha!
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