Bob Johnson on tax: Still no | Arkansas Blog

Tuesday, March 11, 2008

Bob Johnson on tax: Still no

Posted By on Tue, Mar 11, 2008 at 1:10 PM

Sen. Bob Johnson, leader of the Senate "brotherhood" and thus a key player in whether Gov. Mike Beebe can pass a brokered severance tax bill, said he not seen Gov. Beebe's proposal for a 5 percent rate on gas production. But he said his well-known position on the issue hasn't changed: "I’ve been consistently against raising tax. Any time you give me the choice between taxes and good jobs, I’ll take good jobs. I’m not trying to be critical of anyone’s position on this. I just think that this is the wrong time to be passing taxes."

Johnson did not indicate that he has a strategy to defeat the governor's proposal. Indeed, he never said he intended to cheerlead others in that direction He offered no prognostication as to how the proposal would fare, nor could he predict what support his anti-tax position might have among other legislators.

Johnson said there is no question that an increase in the severance tax would mean a subsequent decrease in Arkansas gas production. He argued that gas companies have other options for shale drilling and cited new developments in Mississippi. He said that, due partially to Arkansas' hilly terrain and poor road system, it's more costly to drill here than in the Barnett Shale in Texas. Asked how the state will pay for roads if Beebe's proposal fails, he replied that there could be money from bonds or existing tax mechanisms. He expressed skepticism that the money from a severance tax would contribute more than a drop in the bucket to improving infrastructure.

Johnson and other legislators were not involved in the negotiations that produced today's proposal. Companies that participated in the talks have indicated they will back the governor's efforts to pass the increase. "We are committed to work with the governor and the legislature to pass legislation that reflects the terms of the agreement announced today," said Chesapeake Senior Vice President Henry Hood.

UPDATE: UCA will release a public opinion poll on a severance tax increase tomorrow, along with a  reading on the lottery amendment and ratings of state politicians. A Republican of my acquaintance claims the poll will show in the presidential race that Clinton beats McCain in Arkansas but McCain beats Obama. That sounds plausible, though not if you rely solelyon comments on this blog.


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