Tuesday, July 24, 2012

Sheffield Nelson 'suspends' gas severance tax petition drive

Posted By on Tue, Jul 24, 2012 at 10:29 AM

DEAD THIS YEAR: Gas severance tax proposal.
  • LOOKING DEAD THIS YEAR: Gas severance tax proposal.
Sheffield Nelson announced this morning that his Committee for a Fair Severance Tax would temporarily suspend its effort to put a natural gas severance tax increase on the November ballot.

It sounded, however, more like the functional end of the campaign.

Nelson, the retired gas company executive and former Republican gubernatorial candidate, had days ago conceded long odds on gathering an additional 41,000 signatures in less than a month's time — 30 days from last Thursday.

But, rather than formally abandon the drive, he said today he wanted to "figure out where we are." He said the committee wouldn't make a final decision until Aug. 1. It is impossible to see how suspending the effort can do anything but increase the odds that the drive won't succeed. The longer Nelson technically continues the effort, however, the longer opponents must remain vigilant.

Nelson conceded in questioning by reporters that, barring some unexpected development, the campaign was likely dead. He said he'd paid canvassers for an additional 10,000 signatures that came in after the initial July 6 deadline, but planned to make no more payments, and that he'd spent $97,000 on signatures and less than $150,000 total. He also distributed copies of a letter from the federal SEC, which said that the SEC would investigate what Nelson contended were misrepresentations about what gas companies would spend in Arkansas should the tax pass.

He said the process, his first time trying to get a measure on the ballot via petition, had been "educational," and he'd consider trying again in the future. "There have been rumors about why I was in this, and I'll tell you one more time, just as honestly as I can. I love this state. I care for the people. I had no incentive. I had no resentment against anybody. The three major players were out of state, two of them from Texas, one of them from Australia. So I had no love lost there or no ill feelings. What I had was the desire to get money for the people to pay for the damages...because if we don't, we're going to end up paying, our children and our grandchildren," Nelson said.

The initiated act to raise the tax rate from the current maximum of 5 percent of the wholesale price, with a variety of allowances, to a flat 7 percent needed 62,507 signatures of voters to qualify. The new money would go to state and local road work. The committee, which had the support of the Arkansas Municipal League, turned in about 69,000 signatures. But the secretary of state's office said last week that only 21,347, or about 30 percent, were valid registered voters. The petitions were rife with obvious bogus signatures, leading some of the fiercest opponents of taxing shale gas producers for road damage to call for a criminal investigation of canvassers who turned in the bad signatures.

Nelson said any canvassers who knowingly turned in false signatures should be prosecuted. He said that's the only way to discourage fraud. He defended his own work on vetting signatures, saying that he checked the signatures twice and discarded nine pages of signatures from a single canvasser. He noted that his drive had had a marginally better approval rate than that of a casino amendment, which paid more for signatures.

The Arkansas State Chamber of Commerce had led a well-financed opposition campaign to the measure, with advertising and roving groups of employees who tried to discourage petition signing and it seems, discredit opposing mayors. On July 11, Dickie Kennemore, the mayor of the City of Osceola, Arkansas sent Nelson a letter that read:"There have been hundreds, if not thousands of anonymous telephone calls...stating that the mayor wanted to add a seven percent tax on natural gas bills, and that they should call the mayor and ask them not put a tax on their gas bill, and many of them did just that. When questioned by some as to whom they are and the details of the allegations, the caller became confused and hung up." Kennemore also wrote that when he asked Randy Zook of the Chamber about these calls, Zook admitted to approving them and other attacks, including a full page newspaper ad ("Clinton Mayor Roger Rorie is supporting a 400% tax increase"), against mayors who supported the severance tax.

Gas companies contributed almost $1.8 million to the campaign to block the drive. It has had lawyers at work scrutinizing every signature turned in.

— Cheree Franco contributed to this report

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