Gas petitioners hit resistance at State Fair, Zook speaks at Political Animals Club | Arkansas Blog

Tuesday, July 10, 2012

Gas petitioners hit resistance at State Fair, Zook speaks at Political Animals Club

Posted By on Tue, Jul 10, 2012 at 8:57 AM

Sheffield Nelson, who's leading the campaign for a ballot initiative to increase the severance tax on natural gas, calls to report reluctance to allow signature canvassing on public grounds.

Nelson said canvassers went to the State Fairgrounds this morning to seek signatures among the crowd of low-income people signing up for assistance with utility bills.

Nelson said a State Fair official had first told canvassers they couldn't gather signatures on the fairgrounds, then said they could enter the grounds, but had to be restricted to an area removed from the crowd. Nelson said he's calling the attorney general for some guidance. I have a call in to Ralph Shoptaw, general manager of the State Fair, to see what's up. A nonprofit organization, the Arkansas State Fair and Livestock Show Association, operates the fair on property leased from the state.

UPDATE: Shoptaw said that the fair had generally restricted petitioners when others were renting facilities, such as the group that is renting the Arts and Crafts Building to meet with people seeking utility help. He said he thought the fair had worked out a compromise that allowed the canvassers to set up on a parking lot across the street from the building, in sight of people coming and going. He acknowledged a 1991 attorney general opinion that explicitly said the State Fair, when open to the public, was a public forum at which canvassing should be allowed. But he said he'd called the office himself for more information. He said he thought the opinion was aimed primarily at the fair itself, not use of grounds for other events, and noted that the opinion indicated restrictions could be imposed on where petitioners operated on public grounds. "I don’t know if we’re right or we’re wrong," Shoptaw said. "But we’ll find out."

While the canvassers were at the Fairgrounds, Randy Zook, head of the Arkansas State Chamber of Commerce, spoke to the Political Animals Breakfast Club, parlaying his new slogan, a play on Bill Clinton — "It's the jobs, stupid!" in the chamber-leading opposition to a severance tax increase. He quoted statistics, all coming from the University of Arkansas Fayetteville study commissioned by the State Chamber of Commerce for $47,900. (This study is answered by a Dr. Charles Venus's study, commissioned by Sheffield Nelson and summarized here. The full study is here.

Zook said that in 2007, Arkansas sold 100 billion cubic feet of natural gas. This year, the state will sell over a trillion cubic feet, making us the eighth biggest supplier in the nation. His projected $3 billion in natural gas produced in Arkansas will exceed the projected combined value of soybeans and corn crops in the state and provide 7,500 direct jobs, each with an average salary of $75,000. Zook compared this figure to the 7,200 direct jobs created by a host of companies, among them Welspun, Hewlett-Packard, LM Wind Power, Nestle, Caterpillar and a couple of Toyota suppliers. He estimates that via grants and initiatives, the state invested over $100 million to attract these jobs. He also mentioned that the number of drilling rigs in Arkansas is down, from 51 active rigs in 2008 to 17 rigs, as of yesterday. "We're getting pretty close to treading water. Every rig has several hundred jobs associated," Zook said.

In the Q&A after, a man asked, "Are you suggesting that 17 rigs employ 7,500 people?"

Zook said, "Yes I am, as a matter of fact. We have one study that said one rig drives a thousand jobs. Personally I think that was some flawed methodology, but the 7,500 is a census of the producing companies done by the Center for Business and Economic Research at the University of Arkansas." He also cited the Ryan study, which was commissioned by Little Rock's Friday Law Firm, and the Perryman study funded by the Conway Chamber of Commerce.

Appeals Court Judge Cliff Hoofman mentioned that, although the state hasn't incentivized the natural gas industry, "if there’s any accuracy in what the highway department says, the industry has cost the state in excess of $500 million more than what they have paid in taxes, in damage to the roads. Indirectly, I guess that would be the same cost as some incentives, would it not?"

Zook said last weekend he drove those highways and they were in better condition than a couple of main Little Rock thoroughfares. "Two years ago Highway Department assessed the damage at $455 million. Since the (2008 up to 5%) tax has been in place, it's generated about $160 million. The highway department’s share has been spent to work on the roads on those shale-plate counties. That’s probably $100 million, give or take."

Zook said a sales tax would be a better way to finance road repairs. Jobs created by the severance tax are, "nowhere near the quality of [gas] jobs. They are very short term and using severance tax for road construction is so unpredictable based on the fluctuation in the commodity price, that it's nowhere near as productive for cities and counties as a sales tax.”

Zook also said this about the proposed sales tax to pay for a freeway construction program that also will be on the November ballot:

"The revenue stream that would come from the half-cent temp sales tax — there’s a 10-year sunset on it — the revenue from that could be used to bond a modernization program on the front of a 10-year period, not a pay-as-you-go. We can get a big bang, we can get a big impact, we can make a leap forward with the quality of our highway system. Likewise for cities, we it can be used to bond street programs. Severance tax does not qualify for that because based on commodity price, it fluctuates, as we have seen, too wildly to support an underwriting."

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