Favorite

The tax man 

When he's right he's right, he being Sheffield Nelson. The former gas company executive and gubernatorial candidate has jumpstarted the debate over raising Arkansas's essentially non-existent natural gas severance tax.

Nelson is no newcomer. He favored a tax increase when he was chief executive of Arkla Gas. Indeed, any rational person would see that it makes no sense for Arkansas to ship its gas to Texas, Louisiana and Oklahoma with virtually no tax, while we pay higher taxes on gas extracted in neighboring states. But such has been the political stranglehold of gas producers, particularly the powerful Stephens family, on the Arkansas legislature.

Nelson is leading formation of a committee to gather 62,000 signatures to put a tax — a proposed 7 percent of market value — on the November ballot. He's already formed a “truth squad” of lawyers and PR experts to begin battling the gas companies.

One thrust this week was a letter to the state Ethics Commission asking for a clarification of state law. There is some question, Nelson says, whether a gas corporation can spend an unlimited amount from its treasury to oppose a severance tax without disclosing the amount or types of expenditures. It seems crazy that individual contributions must be reported while corporate outlays are exempt. The Ethics Commission has promised a speedy ruling. We hope it's on the side of accountability.

Nelson said he hopes his campaign can raise about $1 million. He'll contribute heavily and so will friends from other past initiative campaigns he's headed — against casinos, for an increase in public official pay and others. He expects to be outspent, but he expects benefits from free media. Most media commentators have long been convinced that only a special-interest-controlled legislature has stood in the way of simple common sense.

Nelson's history in the gas industry is an enormous benefit. He knows, quickly, for example, that the Fayetteville shale producers figured exploration was profitable long before gas hit $6 per thousand cubic feet and are making windfall profits with a price around $8. He knows, too, that arguments about the need for special allowances for exploration in the shale are bogus. The reserves have been identified. Drilling is not more expensive because the shale wells tend to be shallower. And, contrary to what the gas companies are putting out, special tax dispensation for shale drillers in other states is very limited.

The gas companies will have a one-note campaign — the tax could increase gas bills. There's little evidence of such Arkansas impact, but even if there's some fallout, it will be in the name of pumping tens of millions into state, city and county roads, some of them being destroyed by drilling rigs. Nelson, by the way, while still talking of spending some money on higher education, clearly seems amenable to an all-highway spending plan if Gov. Mike Beebe can bring legislators and gas companies to a legislative compromise.

The spending to beat this tax will be enormous if it goes to the ballot. One gas company, Chesapeake, says it is already taking 100 million cubic feet a day from the shale, a tax burden of $109,500 a year at today's rates, but $15 million under Nelson's proposal on $215 million in sales, even if gas dropped down to $6 per mcf.

With such stakes, all should hope the state's ethics regulators will at least allow us to follow the money.

Favorite

From the ArkTimes store

Comments

Subscribe to this thread:

Add a comment

More by Max Brantley

Readers also liked…

  • Neighborliness, in Little Rock and beyond

    I had a parochial topic in mind this week — a surprise plan by Mayor Mark Stodola to address the Arkansas Arts Center's many needs.
    • Nov 19, 2015
  • Bootstraps for me, not thee

    Mean spirit, hypocrisy and misinformation abound among the rump minority threatening to wreck state government rather than allow passage of the state Medicaid appropriation if it continues to include the Obamacare-funded expansion of health insurance coverage for working poor.
    • Apr 14, 2016
  • Trump: The Obama of 2016?

    Conner Eldridge, the Democratic challenger to incumbent Republican U.S. Sen. John Boozman, launched an assault on Boozman Monday morning rich with irony and opportunity.
    • May 5, 2016

Most Shared

  • Conspiracy theorists

    Back in 2000, I interviewed Rev. Jerry Falwell on camera in connection with a documentary film of "The Hunting of the President," which Joe Conason and I wrote.
  • The health of a hospital

    The Medicaid expansion helped Baxter County Regional Medical Center survive and thrive, but a federal repeal bill threatens to imperil it and its patients.
  • Virgil, quick come see

    There goes the Robert E. Lee. But the sentiment that built the monument? It's far from gone.
  • Real reform

    Arkansas voters, once perversely skeptical of complicated ballot issues like constitutional amendments, have become almost comical Pollyannas, ratifying the most shocking laws.
  • That modern mercantile: The bARn

    The bARn Mercantile — "the general store for the not so general," its slogan says — will open in the space formerly occupied by Ten Thousand Villages at 301A President Clinton Ave.

Latest in Max Brantley

  • Virgil, quick come see

    There goes the Robert E. Lee. But the sentiment that built the monument? It's far from gone.
    • May 25, 2017
  • You want tort reform? Try this.

    The nursing home industry and the chamber of commerce finally defeated the trial lawyers in the 2017 legislature. The Republican-dominated body approved a constitutional amendment for voters in 2018 that they'll depict as close to motherhood in goodness.
    • May 18, 2017
  • French Hill's photo op

    The U.S. House of Representatives last week passed a health care bill that only the blind, dumb or dishonest could call good for any but the wealthy. For its many flaws, it has been hailed as a ticket to congressional gains for the Democratic Party.
    • May 11, 2017
  • More »

Visit Arkansas

Paddling the Fourche Creek Urban Water Trail

Paddling the Fourche Creek Urban Water Trail

Underutilized waterway is a hidden gem in urban Little Rock

Event Calendar

« »

May

S M T W T F S
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31  

Most Recent Comments

  • Re: Conspiracy theorists

    • .... and having a beer with Gene Lyons, who gave the cutest clumsy curtsy before…

    • on May 27, 2017
  • Re: Conspiracy theorists

    • Are you saying Karl Marx has left the building? The New York Times denies it…

    • on May 27, 2017
  • Re: Conspiracy theorists

    • Yes, Lyon's thinks it is Fox Network that promotes the lies that the West has…

    • on May 26, 2017
 

© 2017 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation