Arkansas Blog

Sheffield Nelson continues to promote his ballot initiative to impose a 7 percent natural gas severance tax.

Today he announced that Lu Hardin, the UCA president, has agreed to host a debate on the tax at UCA between Nelson and a representative of Southwestern Energy, the largest natural gas producer operating in the state. Nelson was apparently irked by recent comments of Southwestern president and CEO Harold Korell, who suggested at a Conway Chamber of Commerce meeting that an increased severance tax will force Southwestern to reduce Arkansas operations. Nelson says that the big gas companies won't write off their investment here and turn their backs on big profits simply because of a tax increase.  Ernie Dumas' column this week lays out the specifics neatly.

Nelson wants to take the same stage as Korell, but Korell has yet to agree to participate. Nelson said he hopes that Southwestern will allow someone else from the company to debate if Korell refuses. He said he would like to give a solo talk and take questions at UCA about the tax if Southwestern declines to send anyone. He hopes this will be the first in a series of debates  at colleges around the state.

Attorney General Dustin McDaniel approved the wording of Nelson's initiative earlier this week. Nelson is in the process of setting up an organization to collect the 62,000 signatures needed to put it on the ballot. He said the group will collect signatures at the May primaries. He estimated the cost of the effort at $1 million dollars. He said that he would contribute to the pool, but he declined to be specific about who else will help fund the effort.

State law requires that Nelson's committee eventually disclose names of donors who contribute more than $50. There is no specific requirement that private companies report how much they spend independently, unless they send money to a campaign committee. The Arkansas Ethics Commission will consider an advisory opinion on this issue at a meeting Friday.

Nelson also talked about royalty owners, who have been increasingly vocal about their opposition to the tax. He said that royalty owners are fortunate to be sitting on minerals and can afford to contribute a slight tax from their recent windfall. Nelson argued that the real threat to royalty owners is an increase in property tax based on natural gas reserves in the ground, not a severance tax.