A legislative panel Tuesday signed off on Gov. Asa Hutchinson's request for $1.3 million in rainy-day funds for the Arkansas Highway and Transportation Department to help 10 counties fix roads and bridges damaged by the natural gas industry in the Fayetteville Shale.
Hutchinson said in a letter distributed to the Legislative Council's Performance Evaluation and Expenditure Review Subcommittee that the money will also pay for maintenance on routes traveled by the industry's trucks and other heavy machinery.
The panel recommended that the Legislative Council approve the governor's request when it meets Friday.
A law enacted this year changed the way the natural gas severance tax is distributed and "put about 10 counties in an extreme shortfall," Hutchinson said Wednesday.
"They were having to lay off people. They were having to cut their road expenditures that they were planning on doing," he said in an interview.
Hutchinson said he didn't offer to provide all of the money that the counties asked for, "but we worked through it together."
Ten counties in the Fayetteville Shale have received as much as $2.5 million a year in natural gas severance tax revenue in recent years to help repair roads and bridges, but the counties haven't received any money in the fiscal year that started July 1, partly because of the change in state law and the state's sharply declining natural gas severance tax revenue, said Chris Villines, executive director of the Arkansas Association of Counties.
"It's a budgeting snafu that goes back to 2008," he said in an interview.
That year, the Legislature increased the severance tax on natural gas to pay for road improvements.
In recent years, those counties received severance tax revenue at the start of the fiscal year, Villines said. But the law passed this year changed it so they will receive funds throughout the fiscal year, he said.
Hutchinson's proposal to tap $1.3 million in rainy-day funds would help the counties "bridge the gap" before they begin receiving natural gas severance tax revenue later in this fiscal year, Villines said.
He credited the governor with helping to fix the problem.
"I can't say enough about his willingness to help," he said.
Van Buren County County Judge Roger Hooper said Van Buren County has received roughly between $500,000 and $700,000 a year in natural gas severance taxes in recent years.
Van Buren County hasn't received any of the money for this fiscal year, so he had to delay an asphalt overlay on two roads, he said.
Hooper said he now plans to forge ahead with the projects.
"I felt this was a deal the governor offered and it was a fair deal," he said in an interview.
Van Buren County is in line to get $370,110 of the $1.3 million in rainy-day funds based on its having 28.47 percent of state's 5,546 active natural gas wells, said Randy Ort, a spokesman for the state Highway and Transportation Department.
White County would get $293,280, Conway County would receive $270,920, and Cleburne County would take $240,760 based on their respective shares of the state's active natural gas wells, he said.
The rest of the money would go to: Faulkner County, $94,640; Independence County, $15,730; Pope County, $6,500; Jackson County, $5,330; Franklin County, $2,340; and Johnson County, $390, Ort said.
Those counties received $1.5 million in natural gas severance taxes in fiscal 2011, $1.9 million in fiscal 2012, $1.8 million in fiscal 2013, $1.8 million in fiscal 2014, and $2.5 million in fiscal 2015, according to state records. But in the past several months, the state's natural gas severance tax revenue has dropped sharply.
Metro on 10/15/2015