LITTLE ROCK — Gov. Mike Beebe said Wednesday that he isn’t going to take a stand for or against a proposed ballot measure to increase the severance tax on natural gas to raise money for roads, but he mentioned that he might vote for it.
Little Rock attorney Sheffield Nelson has proposed an initiated act and seeks signatures on a petition to put it on the state ballot.
A group has formed to oppose the measure.
“We raised the severance tax from nothing” in 2008, Beebe said.
The severance tax on gas had been raising about $660,000 a year for the state until it was increased three years ago. It now generates about $50 million a year, though it was projected that the 2008 increase would raise about $100 million. The projection was based on the price of natural gas being twice its existing price.
Increasing the tax was “a major change” because the tax hadn’t been raised for years and passing the increase required a threefourths vote in the state House of Representatives and the state Senate, Beebe said.
“That’s the fight I fought, and that’s kind of where I am,” he said.
He’s not going to campaign for or against the proposed ballot measure, he said.
“Obviously, I am going to vote. I may indeed vote for it,” Beebe said.
He made the remarks during an appearance on the Talk Business website.
The Legislature in 2008 enacted an increase in a three-day special session after Nelson, a former natural gas utility executive and former Republican gubernatorial nominee, said he would help finance a campaign for a proposed initiated act to raise the tax if the Legislature didn’t do so on its own.
Nelson’s current proposed initiated act, if approved by voters, would set the tax at 7 percent of the market value of gas when it’s extracted from the ground, minus the cost of transportation and treatment. The current rate floats between 1.25 percent and 5 percent.
Nelson’s proposal would be on the ballot in November 2012 if the petition he’s circulating is signed by at least 62,507 registered Arkansas voters by July 7. He’s estimated that the proposal would produce about $250 million each year.
Through September, Nelson’s Committee for a Fair Severance Tax has raised $55,000, including $50,000 from Frank Fletcher of North Little Rock, and spent $2,847.41.
A committee opposed to Nelson’s proposal registered with the state Ethics Commission last week. It’s calling itself Arkansans for Jobs & Affordable Energy, and its chairman is Randy Zook of Little Rock, president and chief executive officer of the Arkansas State Chamber of Commerce.
On another topic, Beebe said the “Occupy” protests have been handled much better in Arkansas than in other places.
The city of Little Rock afforded the Occupy Little Rock protesters an opportunity to assemble and protest, he said, and city officials and protesters “sat down together and talked about what would be a reasonable accommodation for everybody and found another location that the city found reasonable and the protesters accepted.”
The protesters believe Wall Street officials were the root cause of the recession, Beebe said.
“I never argue with anybody’s right to protest,” he said. “I think what they need to do is come up with some defined plan of what they would like to see happen. Right now it is just anger and frustration.”
Asked whether state employees will get a cost-ofliving raise next fiscal year, Beebe said he hasn’t decided whether to propose an increase. State employees haven’t received raises partly because of the sputtering economy, he said.
“It is more important for me to make sure that they keep their job than whether or not they get a raise,” he said.
Beebe said his budget instructions to directors of state agencies for the 2012 fiscal session are “vague for a reason. We are watching this economy.”
In a memo dated Oct. 25 to agency directors, Beebe wrote, “We should not be adding programs or obligations under current conditions.”
Arkansas, Pages 9 on 10/27/2011