Republicans object to severance tax | Arkansas Blog

Wednesday, March 12, 2008

Republicans object to severance tax

Posted By on Wed, Mar 12, 2008 at 1:06 PM

Do Republicans hate taxes? Does a wild bear, well, you know?

Republicans have issued a statement decrying Gov. Mike Beebe's negotiated plan to increase the severance tax on natural gas. They say the legislature wasn't involved and the process should be strung out until June anyway. Party Chair Dennis "What We Need Is Another 9/11" Milligan suggests a severance tax (lower than the one charged in Oklahoma and Texas) would drive gas producers away from the gas-rich Fayetteville shale. He doesn't explain the basis for this wisdom.

This news release would be a ho-hum, except that, if every Republican in the legislature signs in, it will take only one additional vote -- and Death Star Bob Johnson would be happy to supply it -- to kill the tax in the Senate. There's always iconoclastic Sen. Dave Bisbee to break from the Republican pack -- and he's no fan of party leadership, in that they deserted his bid to be Senate president pro tem -- but he is running for county judge in Benton County and he might not want to get behind the severance tax either at this time. The tax money WOULD help build roads in growing Benton County, if that matters. But a property tax would have kept Bentonville kids out of trailers and voters there didn't respond to that critical need yesterday.

Delaying a session until June is a non-starter. If the deal can't be done in March, people need to be at the polls at the May primary with initiative petitions.

NOTED: Poll coming this afternoon on the public mood vis a vis the severance tax. Since it won't cost consumers anything and since proceeds will accrue toward the common good, I'm guessing the outcome won't support the Republican position.

NOTED ALSO: Rep. Betty Pickett will take a resolution before an interim committee tomorrow calling for development of an integrated state plan to oversee exploration of the Fayetteville Shale and protect the environment in the process.



Little Rock (3/12/08) – On Monday, Governor Mike Beebe announced that officials of the oil and gas industries and his office had come to terms with an agreement to raise the tax on natural gas by 5%. In order for this agreement to become law, it must pass both houses of the legislature by three-fourths vote. 

Johnny Key (R- Mountain Home), the Arkansas House Minority Leader, issued the following statement today on the proposed settlement between the Arkansas gas companies and Governor Mike Beebe:

"I appreciate the comments of Sen. Bob Johnson concerning the so-called agreement on the severance tax. He makes a compelling case for the detrimental economic effects the Governor’s tax hike will have on the economic growth and job creation stemming from the Fayetteville Shale play. I agree with Sen. Johnson that when presented with the choice of good jobs or tax hikes, we must choose good jobs over taxing an industry just because it is successful.

Another critical issue is the absolute lack of inclusion of the General Assembly in this process. The concept that we should rubber stamp a tax hike without debate or amendments, and do it right now or else, is a slap in the face of our democratic process. I have requested that Governor Beebe delay the call for a special session until his tax hike proposal has been submitted to the Interim Revenue and Taxation Committee and any other committees deemed appropriate by Sen. Critcher and Speaker Petrus. Let these committees have until the end of May to discuss and debate the proposal, and if necessary a special session could be called for early June."

 Republican Party of Arkansas Chairman Dennis Milligan also weighed in on the proposed settlement: 

"I commend Minority Leader Key and both the Republican and Democratic members of the Arkansas legislature who are diligently working to keep taxes low and our economy growing.  With Arkansas’ unemployment rate at 5.6%, higher than the national average, it is critical that we take steps to ensure that we grow our job base here and protect our economic interests.  These jobs won’t come to Arkansas if we drive the gas companies out, which we risk by increasing the severance tax.  I see this as an opportunistic tax, and I think as Arkansans, we should not stand for it."

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